The sale is part of the Sasol's divestment programme to reduce its debt

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Sasol will retain a 20% stake in the pipeline. (Credit: Michael & Christa Richert/FreeImages)

South African energy and chemical company Sasol has agreed to sell a 30% stake in Mozambique gas pipeline to the Reatile consortium for ZAR5bn ($353m).

The company will retain a 20% stake in the pipeline that transports gas from Mozambique to South Africa.

The 865km gas transmission pipeline is owned by the Republic of Mozambique Pipeline Company (ROMPCO), which is joint venture of Sasol South Africa (SSA), a major subsidiary of Sasol, Companhia Mocambiçana de Gasoduto and South African Gas Development Company (SOC) (iGas).

Under the terms of the agreement, an acquisition vehicle owned by the Reatile consortium will acquire the stake in ROMPCO.

The consortium consists of Reatile Group Proprietary and the IDEAS Fund, managed by African Infrastructure Investment Managers Proprietary.

Upon completion of the transaction, SSA will continue to operate and maintain the pipeline as per the agreement between Sasol and ROMPCO.

Sasol group chief financial officer Paul Victor said: “The Sale Shares will, subject to certain adjustments, be sold for a consideration comprising an initial amount of R4,145 billion and a deferred payment of up to R1 billion payable if certain agreed milestones are achieved by 30 June 2024.”

The stake sale is part of the Sasol’s divestment programme to reduce its debt.

The transaction is subject to competition and anti-trust approvals in the relevant jurisdictions and all required consents of third parties including governmental authorities.

It is expected to become effective in the second quarter of 2021.

In November last year, Sasol announced the sale of its 27.75% non-operated interest in the Etame Marin block offshore Gabon to Vaalco.

The block contains the Etame field, which was discovered by Vaalco Energy in 1998.

Vaalco had also agreed to acquire Sasol’s 40% non-operated participating interest in Block DE-8 offshore Gabon (DE-8).