SACOIL Holdings and three other parties have signed a co-operation agreement to advance plans for a 2,600km gas pipeline at an estimated cost of $6bn from the Rovuma basin offshore in northern Mozambique to Gauteng.

In the past six years, about 160-trillion cubic feet of gas has been discovered in Rovuma by Anadarko and Eni, enough to make Mozambique the world’s third-biggest exporter of liquefied natural gas.

Other signatories to the co-operation agreement are Mozambique’s state oil and gas company, Empresa Nacional de Hidrocarbonetos (ENH), a Mozambican private sector consortium called Profin Consulting and China Petroleum Pipeline Bureau (CPP), which has built about 80,000km of onshore pipelines in 40 years.

SacOil CEO Thabo Kgogo said on Tuesday CPP would fund technical studies, so no contribution would be required by the other partners at this stage. The other partners would offer advice on their countries’ regulatory and environmental requirements.

The study would take about 18 months and, if the project were viable, a project company with shareholders would be formed, he said.

Another company that has expressed interest in this pipeline is Centurion-based Gigajoule Group, which supplies gas from the onshore fields at Ressano Garcia to Maputo and recently completed a 120MW gas-fired power station supplying electricity to Mozambique.

CEO Johan de Vos said on Tuesday Gigajoule had completed a feasibility study on the pipeline and presented it to its Mozambican shareholders and the government.

Gigajoule would support any developer of this project, which would be huge and offer various opportunities.

SacOil said en route to Gauteng the pipeline would deliver gas to towns and settlements in Mozambique, stimulating economic growth and clean energy consumption.

This agreement supersedes a previous agreement between SacOil, the Public Investment Corporation (PIC) of SA and the Institute for the Management of State Holdings in Mozambique.

Mr Kgogo said the PIC normally invested only in more advanced projects.

There would be an opportunity for other shareholders and funders when a development company was formed.

Meanwhile, SacOil said it would reorganise its interest in Block III in the Albertine Graben in Democratic Republic of Congo, an oil exploration concession operated by Total.

Its effective interest remains unchanged at 12.5%, but the reorganisation would give it a more direct interest.