Southern Africa Regional Gas Project
description
Transcript of Southern Africa Regional Gas Project
… initiating development and export of Mozambique’s substantial natural gas resources in an environmentally sustainable manner,
thereby contributing towards economic growth and poverty reduction.
Southern Africa Regional Gas Project
A Central Processing Facility (CPF) to
process/clean the gas before transport
A 865km 26-inch diameter Pipeline between the Gas Fields and Sasol’s plant in Secunda, South Africa, including 5 take off-points in Mozambique for future domestic gas use
Project Description
Development of Gas Fields in Mozambique Inhambane Region (Pande and Temane)
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Components in Mozambique and South Africa
Mozambique Temane/Pande Gas
Field Development Central Processing
Facility (CPF) Pipeline between
Temane and Ressano Garcia (at the border)
South Africa Pipeline between
Komatipoort and Secunda
Secunda Synthetic Fuels Plant Expansion
Sasolburg Plant Conversion
Natural Gas Network Conversion
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Upstream Project
Point of Sale
CPFGas Fields Point of Delivery
Pipeline Project
Pipeline
SCI
Sasol Synfuels Natref Others
Downstream
DistributionNetwork
Sasol Gas
UsersTemane Pande
SPT 70% CMH 25% IFC 5%
Wellhead Price + CPF Price
Gas Sales Agreement
Gas Buyer & Shipper
Sasol GasGas Transportation Agreement
Transmission Tariff
SPT 70% CMH 25% IFC 5%
CPF PriceSasol 100%
iGas Option CMH Option
Jointly up to 50%
ROMPCO
Central Processing Facility
GasPaymentContract
Institutional & Implementation Arrangements
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Project Benefits General population
Long-term benefits from the provision of major infrastructure Local gas market development through 5 take off points Gas exploration and gas-based industries
Fiscal Benefits: About US$ 498 million in royalties and taxes over 25 years
Revenues transparently accounted for in the budget Monitoring arrangements for expenditures through MTEF
Additional revenues are expected from returns on GoM equity participation
Environmental benefits through usage of cleaner fuel
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Project Benefits contd.
Local communities About 3000 jobs created during construction, of which 1000 are
Mozambican nationals Social Development Fund of US$ 5million established by Sasol for
investment in community-based activities
Small businesses and local contractors Increased opportunities for local suppliers of goods and services
Sector professional and management staff On the job training and transfer of technology and expertise US$ 3 million training budget provided by Sasol
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WBG approach to mobilize private financing and mitigate political risks…
IFCIFC Investment and Advisory Role:
Equity investment in Upstream
Advisory assistance to CMH in mobilizing financing for the Upstream
Facilitating local participation
MIGAPolitical Risk Cover for equity and debt to SPT & Rompco including:
Breach of contract Currency transferability Expropriation War & Civil Disturbance
IBRD Enclave PRGPolitical Risk Cover for debt to SPT & Rompco including:
Sovereign obligations including changes in laws
Currency transferability Expropriation
Stringing of the Pipe along the right-of-way in Mozambique
Changane River floodplain, vicinity of pipeline
crossing
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A regional project with World Bank Group participation…
Upstream Development – Unincorporated Joint Venture Funding Origin Total
CMH Equity 18.00 Debt Facilities 38.00 Total CMH 56.00 IFC 10.00 SPT Equity 148.00 Debt Facility including political risk coverage from: 182.00
PRG 20.00 MIGA 25.7 ECAs 50.00
Total SPT 330.00 Investments in Upstream Project 396.00 Gas Pipeline currently wholly-owned by Sasol Equity 285.00 Debt Facilities including political risk coverage from: 320.00
PRG 10.00 MIGA 89.00 ECAs 77.00
Investments in the Gas Pipeline 605.00 TOTAL Financing Required for the Project 1001.00
Total Project Cost: US$ 1 billion Total Project Cost: US$ 1 billion
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IFC:Enabling Mozambican Participation
Large project needed Mozambican participation to allay political risk and to give a sense of ownership
Mozambique’s dilemma: How to fund its equity without recourse to government money ?
IFC advised on strategic options to fund equity with a focus on local participation
Invest alongside CMH in the upstream component
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IFC: Equity Investment and Advisory Role
5% equity in the upstream project for a total proposed investment of $18.5 million
Mobilize funds for CMH Local Participation
Phase 1: Institutional investors Phase 2: companies and individual investors once
revenue stream is stable
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MIGA Phase I: Political Risk Cover for Equity
MozambiqueROMPCOBranch
MIGA
SASOL
SPT
SPT Equity GuaranteeUSD27 m
ROMPCO Equity GuaranteeUSD45 m
ROMPCOEquity
South Africa
Equity
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MIGA Phase II: Modification of Coverage to Include Debt
MozambiqueROMPCOBranch
MIGA
SCMB
EFIC
SPT
SACE
SPT Loan GuaranteeUSD25.65 m
ROMPCO Loan GuaranteeUSD89.05 m (MIGA USD42.75 m, SACE USD25 m, EFIC USD21.3 m)
Re-insureUSD25 m
Re-insureUSD21.3 m
ROMPCOLoan
South Africa
Loan
SASOL
SPT Equity GuaranteeUSD2.7 m
ROMPCO Equity GuaranteeUSD4.5 m
Equity
Equity
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Using IBRD guarantees to support Private Enclave Project in Mozambique
First IBRD Enclave guarantee: …proposed guarantee for an export-oriented, commercial project
generating foreign-exchange outside of Mozambique… …adequate arrangements ensuring that the borrower will be able
to meet its obligations to IBRD in respect of IBRD guarantee of the loan.
Use of a PRG is critical in achieving financial close:
Risk of the transaction Benefits from an explicit counter-guarantee Linkage with Bank’s remedies, Bank’s sector dialogue and
conditionality.
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Guarantee Structure
GOMSPT SPT
(Sasol owned, (Sasol owned, Moz company)Moz company)
ROMPCOROMPCO(Sasol owned, RSA (Sasol owned, RSA
company)company)
SCMB (Lead arranger)
Petroleum Production Agreement
Pipeline Agreement
Project Agreement
Project Agreement
Inde
mni
ty
Agr
eem
ent
Loan Agreement Loan Agreement
Guarantee Agreement SPT
Guarantee Agreement ROMPCO
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Proposed Pricing of the Guarantee
Guarantee fee 2 % p.a. collected semi annually Bank retains all
Standby fee 0.75 % p.a. Bank retains all
Front-end fee 1%
Initiation fee US$ 100,000
Processing fee 0.50 % of principal of guaranteed loan First Loss Project lenders to take first loss in
amount equivalent of 5% of principal amount of the guaranteed loan plus six month interest payments for the applicable interest payment period.
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Environment & Social Safeguards Compliance
South African and Mozambican EIAs/EMPs (1999-2003) Bank Group safeguard policies applied to the entire project Bank Group has required the sponsor to carry out:
Regional Environment and Social Assessment (RESA) to assess the broader environmental context and manage the induced impacts
Resettlement Planning and Implementation Program (RPIP)
Social development Action Plan
A consolidated Summary and an Update to facilitate communication and disclosure
Pipeline re-routed to minimize impacts. 13 Baobabs that could not be avoided were transplanted.
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Project Participants
Mozambique
Gas Fields and CPF Pipeline
ROMPCOROMPCOBRANCHSPTIFCCMH
ENHGOM
80%20% 100%
25%
SASOL GAS HOLDING
South Africa
100%
SASOL
SPI
5% 70%
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Project Agreements
Rights and Obligations
South Africa Mozambique
Commercial Operations and Participation
Cross Border Agreement
Cross Border Agreement
Gas Transportation Agreement
Upstream Operation and Maintenance Agreement
Mozambique Pipeline Agreement
Pipeline Agreement Gas Sales Agreement
Pipeline Shareholders Agreement
Gas Act Petroleum Production Agreement
Joint Operating Agreement
Regulatory Agreement
Production Sharing Agreement
Pipeline Operation and Maintenance Agreement
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1.1. Petroleum Production Agreement (PPA)Petroleum Production Agreement (PPA): The GoM grants SPT and CMH exclusive rights for the development, production & disposition of reserves located in the Pande & Temane Field Reservoirs, “the Petroleum Production Area”.
2.2. Pipeline Agreement (PA)Pipeline Agreement (PA): GoM grants authorization to ROMPCO to construct, own & operate the gas pipeline, related infrastructure & equipement to trasport natural gas, for 30 years.
3.3. Gas Sales Agreement (GSA)Gas Sales Agreement (GSA): Regulating the commercial relationship between the sellers- SPT, CMH, & IFC, and the buyer, Sasol Gas Limited
4.4. Gas Transportation Agreement (GTA)Gas Transportation Agreement (GTA): Securing a revenue stream for Rompco though an adquate ship or pay obligation of the transporter, for 25 years
5.5. Joint Operation AgreementJoint Operation Agreement: Between SPT and CMH for the development of the Pande & Temane Fields. SPT is designated as the Operator under the Agreement
6.6. Cross-Border AgreementCross-Border Agreement: Framework agreed by GoM and GoSA to facilitate trade of natural gas between the two countries
7.7. Regulatory AgreementRegulatory Agreement: Provides for the licensing and sets out the scope of regulatory dispensation granted by the RSA under the Gas Act to Sasol
Project Agreements