Presidents Mbeki and Chissano Launch Sasol Natural Gas Project in Mozambique.

Business Editors

JOHANNESBURG, South Africa--(BUSINESS WIRE)--May 3, 2002

The Mozambican natural gas project, a venture between Sasol (NASDAQ: SASOY), the Republic of Mozambique and the Republic of South Africa, was officially launched today.

The launch was conducted by the President of the Republic of Mozambique, Mr. Joaquim Chissano, and the President of the Republic of South Africa, Mr. Thabo Mbeki, at a ceremony held at the Temane gas field in the Inhambane Province of Mozambique. Several senior Mozambican and South African government officials and diplomatic dignitaries attended the ceremony.

The project will bring natural gas to South Africa during the first half of 2004 and it is expected that it will bring significant benefits to both countries. It will increase Mozambique's GDP by more than 20 percent. The project consists of a major gas field development in Mozambique, a pipeline of some 865 km to Secunda in South Africa, the conversion of Sasol's current gas pipeline network and the supply of natural gas to industries in South Africa, including Sasol's factories. The pipeline will be owned by a joint venture between Sasol and the governments of South Africa and Mozambique. The parties have made provision for the future inclusion of black economic empowerment (BEE) shareholders as well as privatization initiatives.

About a thousand new jobs will be created and maximum use will be made of local suppliers during the three-year construction period. Natural gas will also enable local industry in South Africa to use the latest technology, which has been steadily moving to pipeline gas, which is an environmentally friendly energy carrier of choice in many countries.

Pieter Cox, chief executive of Sasol Limited, said: "The cross-border agreements between Sasol and the governments of Mozambique and South Africa have an important significance, because they represent a substantial step towards achieving the vision of President Mbeki, of a New Partnership for Africa's Development (Nepad). Sasol is proud to play a leading role in this African Renaissance, by making substantial investments in South Africa and the surrounding region. Our capital expenditure for this year alone amounts to more than R13-billion (US $1.2 billion), of which more than R12-billion (US $1.1 billion) (about 92%) will be spent in Southern Africa."

Cox paid tribute to the presidents of Mozambique and South Africa, for their vision and leadership in guiding the two countries towards prosperity for all their people.

Sasol will enable the project by converting its existing pipeline-gas market to natural gas, switching its Sasolburg plants from coal to gas feedstock as well as taking gas into Secunda to supplement coal-based growth there. Sasol will grow its current gas market through new market developments to achieve the initial anchor load volume of 120 million Gigajoules per year.

The South African Government and Sasol have signed an agreement governing the regulatory environment to enable the introduction of natural gas into South Africa, as well as to provide for the governments' participation as shareholders in the transmission pipeline company.

Agreements have also been signed between the Government of the Republic of Mozambique, Empresa Nacional de Hidrocarbonetos (ENH, the Mozambican national oil company) and Sasol which provide for Sasol's access to the Temane and Pande gas fields as well as the granting of pipeline rights to Sasol in Mozambique. A shareholder agreement for the pipeline company is in the process of being finalized by Sasol and the two governments. ENH and South Africa's Central Energy Fund (CEF) are parties to this agreement.

The agreements with the Governments make provision for economic empowerment groups to participate in the transmission pipeline from Mozambique. Sasol has already signed memoranda of understanding with two BEE groups for local gas distribution companies in Mpumalanga and KwaZulu-Natal, and it is expected that more will follow.

An agreement has been concluded with the Grinaker-LTA, McConnell Dowell and CCIC Consortium for the engineering and design, procurement management and supply, construction and commissioning of the gas pipeline from Mozambique to South Africa.

Itochu and Europipe will jointly manage the supply of the line pipe which involves pipe manufactured by Hall Longmore (South Africa), Kawasaki (Japan) and Salzgitter (Germany). Transportation of the line pipe to the route sites in Mozambique and South Africa will also be undertaken by local transportation companies. About 5,500 heavy vehicle trips are expected during the period that the pipe will be laid.

Sasol, established in 1950, is a world-leader in the commercial production of liquid fuels and chemicals from coal and crude oil. The company has sales of more than US$6-billion per year and is listed on the Johannesburg Securities Exchange (SOL) with a market capitalization of more than US$7-billion and on NASDAQ (SASOY) in New York. Sasol manufactures more than 200 fuel and chemical products at its plants in Sasolburg and Secunda in South Africa as well as at several other plants abroad. Its products are exported to more than 90 countries around the world. The company has developed world-leading technology for the commercial production of synthetic fuels and chemicals from low-grade coal as well as the conversion of natural gas to environment-friendly fuels and chemicals. Internet address: www.sasol.com