KEY POINTS
- Sasol reduces gas output at Temane facility, citing safety concerns amid Mozambique’s violent post-election unrest.
- The unrest disrupts Mozambique-South Africa gas supply via Rompco pipeline, affecting industrial users in Gauteng and KwaZulu-Natal.
- Mozambique faces deadly clashes, with 54 fatalities reported, as foreign firms like Sasol and South32 grapple with operational challenges.
Sasol Ltd., the South African petrochemical giant, has scaled back natural gas production at its central processing facility in Temane, Mozambique, citing security concerns amid widespread post-election unrest.
The move is aimed at safeguarding employees and assets, the company confirmed in a statement.
Mozambique has experienced escalating violence following a contentious October election, which saw Daniel Chapo of the ruling Frelimo party declared president.
The unrest, marked by deadly clashes and disruptions, has impacted operations for several foreign businesses, including Sasol.
Disruption to gas supply chain
According to CNBCAfrica, Sasol’s Temane facility supplies natural gas to South Africa via the Rompco pipeline, which connects Mozambique’s onshore gas fields to the company’s Secunda industrial complex in Mpumalanga. From there, the gas is distributed to clients in Gauteng and KwaZulu-Natal.
Due to reduced production rates, Sasol has notified its customers and industrial users of disruptions to the gas supply. “We are unable to supply gas at full production levels in order to preserve the stability of the gas value chain infrastructure and pipeline network,” spokesperson Alex Anderson said on Wednesday.
Unrest affects foreign operations
The unrest intensified earlier this week after Mozambique’s Constitutional Council reaffirmed the Frelimo party’s victory, prompting accusations of election irregularities by opposition groups and international observers. Protests and violent clashes have resulted in at least 54 fatalities, including 33 deaths reported on Wednesday alone.
Foreign companies operating in Mozambique have faced operational challenges, with some, like Australian mining firm South32, suspending activities. The unrest has also forced the temporary closure of Mozambique’s primary border crossing with South Africa, further straining trade and logistics.
Ensuring safety amid unrest
Despite the violence, Sasol reported that the immediate vicinity of its Temane facility remains calm. “There has been no breach of security or perimeter around the central processing facility,” Anderson said, emphasizing that the company’s priority is the safety of its employees, service providers, and the surrounding community.
Broader implications
The reduction in gas production underscores the broader risks facing businesses in Mozambique, a nation grappling with political instability and social unrest. Sasol’s decision to scale down operations highlights the vulnerability of energy and industrial supply chains in conflict-prone regions.
While the situation around the Temane facility remains stable, continued unrest could pose longer-term challenges to Sasol’s operations and Mozambique’s attractiveness as an investment destination. For now, Sasol’s focus remains on navigating the immediate crisis while ensuring the safety of its personnel and assets.
