eBusiness Weekly
HARARE – Australian listed oil and gas exploration company, Invictus Energy on Tuesday said it had secured a deal which could see it supplying natural gas to Zimbabwe’s sole Ammonium Nitrate (AN) fertilizer manufacturer Sable Chemicals from its Cabora Bassa project in northern Zimbabwe.
Last year, Invictus announced a major oil and gas potential in the Muzarabani area, located on the border with Mozambique.
According to an analysis of seismic data done by an independent consultant, Netherland, Sewell & Associates, the Muzarabani prospect has a potential of 181 million barrels of condensate, which refers to light oil associated with natural gas.
Under the agreement, Invictus and Sable will jointly investigate the economic and commercial viability of supplying natural gas from the Cabora Bassa project to the Sable fertilizer plant located in Kwekwe, the Midlands province.
“Invictus Energy Limited is pleased to announce that the company and its Cabora Bassa Project partner, One-Gas Resources have entered into a non-binding Memorandum of Understanding with Sable Chemical Industries to progress gas supply from the Cabora Bassa Project subject to a commercial gas discovery being made,” it said.
“Under the terms of the MoU, Sable would be contracted to take 13 billion cubic feet of gas per year with an option to increase to 26 billion cubic feet.”
Invictus said the 20 year off-take agreement with Sable would provide it with a strong revenue source in the event that the Cabora Bassa project was transformed into a source of commercial gas supply.
Invictus managing director Scott Macmillan said the deal provided exciting opportunities for both companies.
“Sable is the sole producer of nitrogenous fertilizer in Zimbabwe and a well-recognised brand in the country. We are proud to work with them to fulfil their ambition of becoming the preferred manufacturer and supplier of fertilizers and other chemical products in Africa,” he said.
“The potential gas supply of up to 70 million cubic feet per day for 20 years is a substantial volume which will help underpin the development of any commercial gas discovery we make in the Cabora Bassa Project.”
Sable chief executive officer Bothwell Nyajeka said the supply of gas by Invictus would save the company foreign currency.
The arrangement, he said, would also help the company ramp up production capacity from the current 240 000 tonnes of AN fertiliser per year.
“The potential future supply of gas by Invictus is also critical for Sable’s medium-term expansion program aimed at increasing production to 600,000 tonnes of nitrogenous fertilisers,” he said.
Sable Chemicals, which was established in 1969, currently imports gas from South Africa for its production processes, a situation which has resulted in reduced output over the years due to foreign currency shortages. – New Ziana
