Construction of a US$600-million oil pipeline linking Mozambique to South Africa will begin by the end of the year, Mozambique's state oil company said Friday.

The 500-kilometer pipeline will link Mozambique's capital Maputo to the Quendal region in neighbouring South Africa's Gauteng province, the country's economic hub where Johannesburg and Pretoria are located.

Petromoc Manager Director, Casimiro Francisco, said the pipeline, which would transport 6 billion liters of oil per year to Gauteng, was "vital to boost the region's economic growth in the near future."

While Mozambique has plentiful gas deposits, it is not an oil producer. But its ports provide easy access to Gauteng. Maputo port is only about a six-hour drive northeast of Johannesburg. The nearest port to Johannesburg in South Africa - Durban, also a six-hour drive - is heavily congested.

According to information provided by Casimiro, the pipeline is primarily destined for South Africa, but there are other countries in the region interested in extending it from South Africa, principally the diamond-rich nation of Botswana.

The project is to be implemented by a US$1.5-billion joint venture between Mozambican and South African companies. Petromoc has the biggest stake, with 40 percent.

South Africa and Mozambique work closely in the energy stakes.

South Africa's state petrochemical giant Sasol and Mozambique Hydrocarbon Company have just completed an 856-kilometer pipeline to transport natural gas from Mozambique to Sasol's refinery across the border in Secunda, Mpumalanga province.

Copyright 2008 dpa Deutsche Presse-Agentur GmbH