Mozambique's state hydrocarbon company Empresa Nacional de Hidrocarbonetos (ENH) is in negotiations with potential investors, including South Africa's Sasol and pipeline operator ROMPCO, over the development of a natural gas project in Mozambique valued at approximately US$250 million. The initiative aims to strengthen regional energy supply and position Mozambique as a gas distribution hub in southern Africa.

According to Reuters, the project envisages the installation of floating storage and regasification units for natural gas in Beira, in Sofala province, and in Inhassoro, in Inhambane province, as well as the construction of a pipeline of approximately 140 kilometres.

The new infrastructure is intended to connect to the pipeline operated by ROMPCO, which transports natural gas from Mozambique to Sasol's Secunda industrial complex in South Africa.

ENH's Chairman of the Board of Directors, Rudêncio Morais, said the company intends to have the infrastructure operational between 2030 and 2031, in line with the development of the major liquefied natural gas (LNG) projects in the Rovuma Basin.

"We want to have our infrastructure ready by 2030 or 2031, in sync with Mozambique LNG, Rovuma LNG and Coral North," he said.

According to Morais, Mozambique intends to leverage its gas reserves to strengthen energy supply to neighbouring countries at a time when southern Africa is facing supply difficulties.

"Mozambique is going to become what we call an energy hub," he said.

The initiative comes against the backdrop of an anticipated decline in production from the Pande and Temane fields, operated by Sasol in Mozambique, which currently account for a large share of natural gas supply to South Africa.

In this context, reserves from the Rovuma Basin could constitute an alternative source to meet regional demand.

ENH is part of a group of state-owned companies that received, in 2025, an exclusive 30-year concession to develop and operate natural gas infrastructure in Mozambique.

Although the bulk of production from the major Rovuma projects is destined for export, petroleum legislation approved in 2026 provides for the allocation of at least 25% of oil and natural gas production — including LNG — to the domestic market.

Sasol has said it is premature to anticipate the nature or scale of any potential investment in the project, as it continues to seek alternatives to secure future supply. ROMPCO did not respond to Reuters' request for comment.

Negotiations therefore remain at a preliminary stage, with no confirmation of investment commitments or a final investment decision.