Sasol Ltd. has agreed to sell its stake in a 175-megawatt gas-fired power plant in Mozambique to Azura Power Ltd. for about US$145M as part of an accelerated disposal program to pay down debt.
The sale of its 49% shareholding in the Central Termica de Ressano Garcia plant, or CTRG, is subject to conditions including a pre-emption right by state-owned Electricidade de Mocambique, that holds the majority stake, as well as closing adjustments, the company said Monday in a statement. It has yet to announce a winning bidder for its stake in half of the 865-kilometer (538-mile) Rompco natural-gas pipeline that runs from Mozambique to South Africa.
Sasol expects the completion of about US$3.5B in asset sales by the end of the financial year as part of an effort to raise US$6B that may include a rights issue depending on the ongoing success of the disposal process, it said earlier this month. While the fuel and chemical maker’s prized asset put on the block was a joint venture in its U.S. base chemicals business, developers in the region anticipate the Mozambique pipeline sale will open up a route to market for liquefied natural gas.
Rompco currently transports gas from the onshore Pande and Temane fields in Mozambique to Sasol operations in South Africa. After those resources are depleted, it could be filled again from LNG landing at a terminal planned in Maputo.
Total SE and Gigajoule Group, an energy developer, were among bidders for the pipeline stake in October, according to people familiar with the matter at the time. They’re also partners in the import terminal.
Sasol didn’t immediately respond to emailed questions about the progress of the pipeline sale.
Azura Power, which agreed to buy the stake in CTRG, owns and develops almost 1,400 megawatts of projects throughout Africa, according to its website.
Source: Bloomberg via Club of Mozambique