MAPUTO, — Plans to build a gas pipeline from the district of Palma in the gas-rich northern part of Mozambique to the South African province of Gauteng have taken another step forward with the signing of a partnership agreement to build the pipeline.

According to a report in Monday’s issue of the independent newspaper O Pais, the agreement, which was signed here Friday, will build on a memorandum of understanding (MoU) between the partners signed in February.

The companies which signed the agreement were Profin Consulting, Mozambique’s National Hydrocarbon Company (ENH), the China Petroleum Pipeline Bureau (CPP), the China Petroleum Technology Development Corporation, and the South African company, Progas Investment.

Between them, the two Mozambican partners will hold 56 per cent of what will be called the African Renaissance Pipeline. The Chinese partners will hold 20 per cent, and the South Africans 24 per cent.

The project viability studies, estimated to cost 45 million US dollars, will be financed by CPP. The total cost of the 2,600-kilometre pipeline has been estimated at six billion USD, and China will provide credit for 70 per cent of this amount, or around 4.2 billion USD.

At a media briefing on the project, Profin Consulting chief executive officer Olivia Machel said its key goal is “to promote the strategic development of the natural gas sector in Mozambique, so as to ensure Mozambican control of the sector, and to allow the (Mozambican) government to maximize revenue from the hydrocarbon resources in the Rovuma Basin” in northern Mozambique.

It is hoped that the project will create 50,000 direct and indirect jobs, ensure technical and professional training and transfer technology to Mozambicans.

Profin Consulting was set up in July 2015 specifically to ensure Mozambican participation in the pipeline. The best known figure in the company is the chairperson of its general meeting, former defence minister Alberto Chipande, the man who fired the first shots in Mozambique’s independence war in 1964.

However, the South African company SacOil Holdings has held back from signing the joint venture agreement for the development of the pipeline. SacOil is part of the African Renaissance pipeline project consortium planning to build a 2,600 kilometre pipeline to transport gas from the north of the country to South Africa, with spurs along the way to support national development, but its name was notable by its absence from the agreement signed in Maputo on Friday.

According to a statement issued by Sacoil, the company “elected not to sign the joint venture agreement at this time, while the Board evaluates the agreement and the associated opportunity with regards to the company’s participation in the project”.