Mozambique wants to retain most of its gas exports

MAPUTO, Sept 2 (Reuters) - Mozambique said on Tuesday it is negotiating with South Africa's petrochemical group Sasol (SOLJ.J) to double the amount of natural gas that Mozambique can retain rather than export to South Africa.

The bulk of natural gas treated at a plant in Temane in Mozambique is pumped along an 865 km pipeline to Sasol's refinery in Secunda South Africa and then sold in that country.

An offshoot connection from the main pipeline carries gas to the Mozambican industrial city of Matola, where it is distributed by the Matola Gas Company (MGC).

MGC chief executive officer, Bruno Morgado, told Reuters that MGC was allowed to take a maximum of six million gigajoules of gas a year, but this amount was not sufficient to meet the growing demand for gas in Matola.

"We're demanding that the pipeline supply us annually with at least 10 million gigajoules of gas, so that we can respond to the increasing demand for gas resulting from the development of the Matola and Maputo industrial park," he said.

Morgado said about 20 million gigajoules should be pumped annually to South Africa, but between 10 and 14 million gigajoules of this still does not have a market.

"We would like this gas to be allocated to Mozambique," Morgado said.

Morgado said the high prices of imported liquid fuels have been a factor in persuading companies to switch to natural gas.

Over 20 companies in the Matola area, including the Mozal aluminium factory owned by BHP Billiton (BLT.L), are purchasing natural gas from MGC. (Reporting by Charles Mangwiro)