A sentiment echoed, certainly on Day 2 of the recent Southern Africa Oil and Gas Conference 2023, held 13 – 14 September in the CTICC in Cape Town, was born of the frustrations caused by the dithering of government on the delivery of The Gas Master Plan and the Gas-to-Power IPP Programme.
Editor Robin Hayes reports.
To say that Southern Africa is awash with natural gas would be an understatement. Both onshore and offshore, vast amounts of oil and natural gas have been discovered and developers are champing at the bit to commercialise the resource and create a gas economy. This would go a long way to resolving our energy crisis while creating desperately needed employment and generate handsome tax revenues. But South Africa seems to be in a dwaal – a dreamy, dazed or absent minded state – when the enormous potential of natural gas is staring them in the face.
South Africa’s neighbours – particularly Namibia, Mozambique, Botswana and Zimbabwe have all realised the economic potential of natural gas and are pressing ahead with commercial partnerships and unless the South African government make a genuine commitment to exploit this huge resource it will be left behind as exploration companies make deals with more committed governments.
Years of delays put us on the back foot
Despite years of delays and indecision, Dr Bongani Sayidini from the Petroleum Agency SA – the organisation tasked with delivering The Gas Master Plan and the Gas-to-Power IPP Programme admitted to conference delegates the inordinate amount of time it has taken to get the Plan in place but advised that the end was near (!) and a draft plan would be ready for Cabinet perusal and be gazetted by December 2023.
Sayidini pointed out that while discovered gas resources were encouraging, it was imperative that the Plan confirmed ‘proven’ demand which he indicated the draft plan had confirmed.
Several speakers reiterated that bringing natural gas production on line was not a five minute thing – as Renergen CEO Stefano Marani pointed out to CBN’s editor in an exclusive interview carried in the September edition. Renergen’s road to commercialisation has taken 10 years and its second phase will only come on stream in 2026/27.
This sentiment was echoed by Kinetiko Energy’s CEO Nick de Blocq who told delegates that discoveries of natural gas in Mpumalanga alone are more than double that of the ‘old’ Mossgas offshore resource. The ‘bonus’ of these discoveries of being in a geographically ‘perfect’ location, next door to Sasol’s Secunda chemical plant, the Lilly gas pipeline and a stone’s throw from the aging and dysfunctional coal fired power stations of Arnot, Hendrina and Majuba – all scheduled for decommissioning within the next 10 years. Stations ripe for converting to abundant natural gas?
Furthermore, de Blocq advised delegates, that gas delivered to Sasol Secunda via the 835km ROMPCO pipeline from the Pande Temane gas fields in Mozambique was running out as early as 2026 with depletion estimated by 2030. In fact, he said, Sasol had already advised its gas customers that it couldn’t guarantee supplies beyond 2026… So the sooner the government gives the green light, the better. Downstream thermal industries dependent on Mozambiquan gas can’t wait 10 years for an alternative supply!
A gas economy beckons
The conference was advised that the worldwide average of natural gas consumption as part of the energy mix stands at 24%. Consumption in the USA is 32%, the UK 39%, Russia 55% and in Germany, 26%. And in South Africa – just 3% with its immense resource conservatively estimated at least 6 trillion cubic feet (tcf) without resorting to fracking. Remember that Petro SA’s refinery in Mossel Bay existed for more than 28 years on 1,5tcf.
Speakers pointed out that the Mossel Bay facility has created between 46 000 and 56 000 jobs, similar employment as gas supplies from the ROMPCO pipeline which also generates more than R250-million in taxes.
So with natural gas ticking all the right boxes, especially with our current energy crisis, why has the government been dragging its feet, particularly as natural gas forms part of the energy mix envisaged in the Integrated Resource Plan 2019? While no speakers ventured to address the elephant in the room – coal and corruption, there was discussion about the number of government agencies involved in bringing the gas resource to market – bureaucracy, red tape and the silo mentality were mentioned as impediments. These factors coupled with the environmental lobby for fossil free energy – supported by vested interests in renewables such as wind and solar added another layer as well as incompetence and a lack of skills.
