A consortium of South African and Mozambican energy companies have discovered two significant natural gas deposits off the coast of central Mozambique's Inhambane province, a local newspaper reported this week.

Minister of Natural Resources Esperanca Bias was quoted by the daily Noticias newspaper on Monday as saying that the reservoirs were found at a depth of 1.3 kilometres. The layers found were between seven and 15 metres in thickness and are believed to contain a considerable amount of gas.

Sasol Petroleum Sofala, a subsidiary of South African petrochemicals giant Sasol, has a 50 percent share in the consortium. Petronas Carigali Mocambique, an exploration company, holds 35 percent and Mozambique's national oil company, Empresa Nacional de Hidrocarbonetos (ENH), holds the remaining 15 percent.

First major gas find

This is the consortium's first major gas find since it began prospecting for gas in the area in 2008, at a cost, to date of more than $100-million.

"If the existing gas is commercially viable, this discovery will allow us to cover domestic demand of natural gas," Bias said, adding the gas could be used in electricity generation, industry and motor fuel.

The consortium now has six months to dig more wells to assess the viability of the find and present a report to the government on the quantity and quality of the gas.

Sasol and ENH are already extracting around 140-million gigajoules of natural gas in Pande and Temane gas fields, also in Inhambane, but inland. The gas reserves in these fields are estimated at around five-trillion cubic feet.

That gas supplies household and industrial users in Mozambique and neighbouring, energy-hungry South Africa.

Bias said the volatility of global oil prices was creating a flurry of interest in gas exploration.

"What we do today with oil can be done, almost at 90 percent, with natural gas," she said.

Sapa

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