Maputo — Production capacity in the Pande and Temane gas fields, in the southern Mozambican province of Inhambane, is to be expanded by 50 per cent as from 2010, to respond to the growing demand, both in Mozambique, and in the neighbouring South Africa, reports Friday's issue of the Maputo daily "Noticias".

The current estimates of production are placed at an annual figure of 120 million gigajoules (about 3 billion cubic metres of gas).

Mineral Resources Minister Esperanca Bias told reporters that a study is currently underway to produce cooking gas and kerosene from natural gas, rather than importing these fuels.

Addressing a meeting of economists from the Community of Portuguese Speaking Countries (CPLP), Bias said on Thursday that Mozambique has the geological potential for the discovery of new gas fields.

Exploiting the gas fields is in the hands of a consortium led by the South African petro-chemical giant SASOL (with 70 per cent of the shares). Its partners are the Mozambican Hydrocarbon Company (CMH), with 25 per cent, and the private sector funding arm of the World Bank, the International Finance Corporation (IFC) with the remaining five per cent.

The consortium was granted rights to exploit the Pande and Temane fields for 30 years. Because of high demand for gas, the entire known potential of the two fields is now pledged to customers on long term contracts. Most of the gas goes directly to Sasol's factories in the South African town of Secunda.

Inside Mozambique, the gas is used to generate one megawatt of electricity (to supply the districts in the northern part of Inhambane), and to supply industrial consumers in the southern city of Matola (who use up to 1.5 million gigajoules a year). "In the future there are possibilities to use the gas to produce electricity for export, fertilizers, processing of iron ore, and the production of synthetic liquid fuels", said Bias.