Mozambique is advancing plans for a natural-gas infrastructure project that could strengthen energy cooperation with South Africa, connect regional markets and create new opportunities for industrial growth. The proposed development would link the coastal areas of Inhassoro and Beira to the existing pipeline network supplying gas to South Africa, reflecting a broader ambition to transform Mozambique’s natural resources into a foundation for regional economic cooperation.
At the centre of the proposal are two floating storage and regasification units (FSRUs), planned for Inhassoro and the Port of Beira. These facilities would receive liquefied natural gas (LNG), convert it back into gas and supply it through a proposed 140-kilometre pipeline connected to the 865-kilometre Republic of Mozambique Pipeline Investments Company (ROMPCO) network, which transports gas to South Africa’s Secunda industrial complex.
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Unlike Mozambique’s major offshore LNG export developments in the Rovuma Basin, the proposed infrastructure is intended to strengthen regional gas distribution and provide another route for supplying industrial consumers.
Reported project costs vary. Several reports have cited approximately $250 million, while Empresa Nacional de Hidrocarbonetos (ENH) President Rudêncio Morais said in August 2026 that about $150 million would be required to complete the project. The difference may reflect variations in project scope or development phases. ENH has also estimated that approximately $10 million would be required for initial feasibility studies and development planning before financing arrangements progress.
The proposal comes as South Africa prepares for a potential decline in natural-gas supplies from Mozambique. Sasol’s third-party gas supplies from the Pande and Temane fields are expected to cease by June 2030, with pipeline deliveries to industrial users facing a phased reduction from 2028 as reserves decline.
The anticipated shortfall presents a significant challenge for gas-dependent industries in Gauteng and Mpumalanga, including chemicals, glass, steel, automotive manufacturing and food processing. These sectors depend on reliable energy supplies to maintain production, manage operating costs and sustain employment.
A new supply route could help diversify regional energy options, although the proposed project’s expected 2030–31 delivery timeline means it is unlikely to resolve the immediate supply pressures. South Africa will therefore need complementary measures, including alternative suppliers, demand management and investment in LNG import infrastructure.
Mozambique’s gas resources provide a significant foundation for this ambition. The country holds substantial natural-gas reserves and is developing major LNG projects involving international energy companies, including TotalEnergies, ExxonMobil and Eni. The Coral Sul floating LNG project is already producing, while Coral North is targeting first production in 2028.
Much of Mozambique’s gas development has historically focused on international export markets. The proposed Beira–Inhassoro infrastructure offers a different opportunity: connecting gas resources to regional demand and potentially strengthening the country’s position as an energy hub.
Mozambique’s revised Petroleum Law, effective June 2026, also requires at least 25 per cent of oil and gas production, explicitly including LNG, to be allocated to the domestic market. The practical impact will depend on implementation, the projects covered by the requirement and the availability of infrastructure capable of receiving and distributing the gas.
For Mozambique, improved domestic and regional access could support industrial development, attract investment and expand opportunities for businesses operating across the energy value chain. For South Africa, diversified supply options could help protect industrial activity against declining pipeline deliveries.
ENH forms part of a group of state-owned companies granted an exclusive 30-year concession in 2025 to develop and operate natural-gas facilities at Beira and Inhassoro. This provides an institutional framework for the proposed infrastructure, but investors will still require clarity on financing, tariffs, construction responsibilities, pipeline access and operating arrangements.
Sasol, which operates the Pande and Temane fields and holds a stake in ROMPCO, has indicated that it would be premature to speculate on the nature or scale of potential investments as it explores alternative gas supplies. The project therefore remains at an early stage, with important commercial and technical questions still to be resolved.
Beyond energy security, construction and operation could generate opportunities in engineering, port services, pipeline maintenance and technical training. Local businesses could benefit from procurement contracts, while skills-development programmes could prepare workers for specialised roles in the energy industry.
However, these benefits will not emerge automatically. Their scale will depend on procurement arrangements, workforce training and the extent to which local companies are integrated into the project’s supply chain.
The proposed pipeline reflects a wider opportunity for African countries to strengthen regional trade by connecting natural resources with industrial demand. Infrastructure that supports cross-border energy flows can help create more integrated markets, encourage investment and improve the resilience of regional supply networks.
Nevertheless, the project’s proposed 2030–31 target raises questions about timing and financing. Its success will depend on securing investment, establishing viable gas-supply arrangements and agreeing on the terms under which the infrastructure will operate. The source of gas for the FSRUs, the volumes available to domestic and regional customers, and access to the existing ROMPCO network remain important considerations.
For South Africa, the project could eventually provide an additional supply route, but it will not eliminate the need for near-term solutions to the gas cliff.
