CONSORTIUM FOR THE PALMA – GAUTENG PIPELINE: “Profin Consulting, SA belongs to the Chipande family”, CIP reports

The South African gas and oil company SacOil, announced the establishment of a consortium which is to propose, to the Mozambican Government, the construction of a natural gas pipeline from Palma (Cabo Delgado) to Gauteng (South Africa), with branches to deliver gas to “cities and urban settlements” in Mozambique, according to the Mozambique Center for Public Integrity (CIP).

In addition to SacOil, the announced consortium also includes the public company ENH (Empresa Nacional de Hidrocarbonetos) and Profin Consulting, SA, a Mozambican private equity company, in which Alberto Joaquim Chipande and his wife, Hortência Cornélio João Mandanda Chipande are the shareholders.

The interest shown by SacOil-ENH-Profin’s in building the gas pipeline is not the first to be announced. Other gas pipeline construction projects whose purpose is to transport natural gas from Palma to Maputo and South Africa have been announced, including the Gasnosu project (north-south gas), in which the applicants are the South African Gigajoule and the Mozambican ENH.

All projects depend on the Government’s appraisal and approval for their implementation, and to this end, a call for tender must be issued for purposes of governmental transparency. All that exists at this moment are private projects belonging to companies interested in building the gas pipeline, which is part of the national natural gas development plan.

The next steps to be taken following the announcement of the establishment of the SacOil, ENH and Profin consortium involve conducting the project’s economic and social feasibility studies, as well as preparing the gas pipeline construction project. This process will probably not take less than six months; thereafter it must be submitted to the Government for analysis, and it is expected that this will be done through a public tender.

Participation of the national business sector in the extractive industry projects Although there is no specific legislation on local content2 for projects in the extractive industry, the sector’s legislation defends the participation of the national business sector in the extractive industry’s projects3 .

The SacOil-ENH-Profin consortium states it has given priority to the participation of the national business sector, since it has Profin, a Mozambican private equity company in its shareholder structure. Thus, the guarantee given to the national business sector’s participation in other infrastructures is achieved through companies such as Profin, which belong to the political elite linked to the party in power.

The gas pipeline proposed by the consortium will be implemented by China Petroleum Pipeline Bureau, a company presented as having more than 40 years’ experience in research, engineering, construction and gas pipeline construction technology. It is presented as having over 80 thousand kilometres of gas pipeline projects onshore and over 10 thousand kilometres of gas pipeline offshore.

In the two paragraphs in the announcement that describe the gas pipeline, SacOil mentions that the gas pipeline will have branches to distribute gas to “the main cities and urban settlements” in all provinces of Mozambique (those it passes through, obviously). It does not provide anything more substantial regarding the project.

Agreement between Profin and ENH Also mentioned in SacOil’s announcement is the existing agreement between Empresa Nacional de Hidrocarbonetos and Profin, signed in October 2015, regarding the “participation…find more by clicking here.