Pande-Temane Natural Gas Pipeline, Mozambique&South Africa

Description

In 2008, the South African company Sasol, one of the biggest corporate carbon emitters in the world, applied to the UNFCCC for the right to produce and sell carbon credits. The company claimed that it needed a new source of fuel and had the option of choosing between opening a new coalmine and building a pipeline to the gas fields of Pande and Temane in Inhambane, Mozambique. However, Sasol had been considering building a profitable pipeline since 1998, well before the option of selling carbon credits was even on the table. Environmental organizations protested against this decision on the basis that the company had already planned to make this investment. According to SASOL the natural gas pipeline CDM project was terminated in 2010 based on diminishing returns brought about by increasing methodology requirements and concerns pertaining to our intellectual property.

Basic Data
NamePande-Temane Natural Gas Pipeline, Mozambique&South Africa
CountryMozambique, South Africa
ProvinceInhambane
SitePande
Accuracy of LocationLOW country/state level
Source of Conflict
Type of Conflict (1st level)Fossil Fuels and Climate Justice/Energy
Type of Conflict (2nd level)Oil and gas exploration and extraction
REDD/CDM
Specific Commodities
Natural Gas
Project Details and Actors
Project DetailsIn 2004, SASOL bought the rights from Enron to explore gas in Pande-Temane. The project includes a pipeline which runs from the gas fields in Pande-Temane to its Secunda plant in South Africa. This is a billion dollar project, supported by the Mozambican government, investors, and the South African state. SASOL pays taxes primarily through granting the Mozambican state 5% of the gas produced, as well by setting up socially responsible projects. The gas fields currently produce 147 million gigajoules of natural gas a year--well above the estimated 120 million. Only 3 million gigajoules are consumed by Mozambique. This goes primarily to large industries such as Mozal and Cimentos de Mocambique, as well to run a very small number of public buses (some reports estimate as little as 20 buses). The transportation of natural gas to local industries is operated by Matola Gas Company (MGC). This project has created around 700 jobs. Estimated emission reductions hovered around 6,4 Mt of CO2 --worth to R 1.1#billion a year.
Type of PopulationRural
Start Date2008
Company Names or State EnterprisesSasol from South Africa
Relevant government actorsEmpresa Nacional de Hidrocarbonatos , The Matola Gas Company, Ministry of the Environment , Ministry of Trade and Industry
International and Financial InstitutionsCorporaciĆ³n financiera Internacional (CFI)
Environmental justice organisations and other supportersJustica Ambiental, Earthlife Africa, Vall Environmental Justice Alliance, South Durban Community Environmental Alliance, Iniciativa de Transparencia na Industria Extractiva, Centro de Integridade Publica, Instituto de Estudos Economicos e Sociais
The Conflict and the Mobilization
Intensity of Conflict (at highest level)LOW (some local organising)
When did the mobilization beginIn REACTION to the implementation (during construction or operation)
Outcome
Project StatusIn operation
Do you consider this as a success?Not Sure
Why? Explain briefly.In early 2009, the UNFCCCs methodology panel recommended that the project be rejected. The reasons for rejection inclueded poor proposals details, miscalculation of the emission reductions, and the lack of a plan for leakages. Environmental justice organizations had hoped for a stronger statement against companies that were patently manipulating the CDM system. At the time, Sasol was in the process of building three additional coal to liquid plants in Indonesia, China and South Africa. Meanwhile, the project itself continues and SASOL is expanding its reach in Mozambique. In 2010 the Mozambican government grants SASOL and the Empresa Nacional de Hidrocarbonetos a concession for oil exploration in Inhambane. They will have 8 years to explore an area of aprox 8370 km. In the event that they find oil, they will have a 30-year consession which will be split 90-10%.
Sources and Materials
References

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Erion, G. (2005) Low Hanging Fruit Always Rots First, Centre for Civil Society, Durban.
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Earthlife Africa (2009), Climate change, development and energy problems in South Africa: another world is possible, Johannesburg.
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Sasol Annual report (1999).

Links

Earth Life
[click to view]

Creamer Media
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Tni, Sasol and CDM: The Developed World Pays Sasol to Increase its Carbon Emissions
[click to view]

Sasols greenwash - according to Earthlife Africa
[click to view]

Meta Information
ContributorRuth Castel-Branco
Last update05/06/2014
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