Fostering Regional Integration in Africa: Lessons from Sasol Natural Gas Project between South Africa and Mozambique

Abstract

This paper contains the results of a case study aiming at assessing the extent to which the public-private Sasol Natural Gas Project between South Africa and Mozambique contributes to fostering regional cooperation and integration and to identifying operational challenges that are specific for multinational operations. The core objective of the project is to develop the previously untapped natural gas resources available in Mozambique in order to supply and convert Sasol’s coal-burning petrochemical plants to natural gas. This objective fits both governments’ goals to develop gas market for Mozambican and to diversify the energy supply mix for South African market. Also, the project serves broader development objectives of strengthening the bilateral economic ties between Mozambique and South Africa; thus, contributing to regional cooperation and integration. The paper draws on project documentation including project completion report and supervision reports carried out by donors, as well as on results of a field mission in South Africa and Mozambique between 26 November and 9 December 2011.