The Department of Trade and Industry (DTI) has launched the Gas Industrialisation Unit (GIU), aimed at spearheading a medium to long-term gas industrialisation strategy for South Africa and the Southern Africa region.
The aim is to unlock power constraints and reduce carbon intensity, to secure a more balanced energy mix in neighbouring and wider regional economies, deepen industrial development and investment, and build regional industrial integration.
“The gas industrialisation policy has to be central to what we do going forward,” said DTI deputy director-general for industrial policy Garth Strachan.
He said a working group, made up of key independent industry experts, advisers and academics, as well as Sasol, had done vital work over the past 12 months in preparation for the GIU and in driving the establishment of South Africa as a hub for the oil and gas sector in the region.
“They’ve done critical work in developing a robust funding strategy to underpin the work of the GIU and have laid the foundation for regional cooperation and the sequence of concrete work programmes,” said Strachan.
He told the launch, hosted jointly by the DTI and the South Africa National Energy Association in Cape Town, that the GIU would kick-start the gas utilisation industry, and work with the Independent Power Producers Office and the Department of Energy to support the liquefied natural gas- (LNG-) to-power procurement programme.
The GIU would include representatives from the private and public sector, labour and civil society. Issues of black economic empowerment would be central to its work.
“The vision of the GIU is to build on the momentum of gas-to-power development, using gas for scalable up- and downstream industrialisation, and as one of the pathways to regional industrialisation.”
In the short term, the plan for the GIU is to kick-start the early stage of gas industrialisation via LNG imports, with the hope that it will leverage relatively cheap international gas prices over at least the next five years, said Strachan.
He added that the unit would deepen work with Transnet and the Transnet National Ports Authority in a collaborative effort, including infrastructure requirements. It would work with upstream oil and gas industry bodies to determine the goods and services needed for their operations in the ports of Richards Bay, Saldanha and Coega, as well as in the special economic zones.
In the medium term, the DTI, through the GIU would aim for large-scale importation of natural gas from African regional sources, drawing on the huge potential of recent finds in Mozambique, Tanzania and Botswana, in particular. Strachan said this would be in the context of shared and collaborative regional development, as well as industrial development and integration.
In the longer term, the plan was to explore the potential of shale gas reserves in the Karoo, as well as offshore resource potential. Quality, volume and environmental sustainability would all be taken into account.
“We’re confident we have turned the corner. We’ve got to ensure that oil and gas industrialisation becomes one of the key pillars of our effort to industrialise. The work has to be led by the DTI, but if there is one sector where we have to ensure that intragovernmental policy coherence drives what we do, this is the sector.”