JOHANNESBURG (miningweekly.com) – Imported liquefied natural gas (LNG) is expected to initiate the greater use of gas in South Africa’s currently coal-dominated electricity generation.
Anticipated is the establishment of infrastructure at South African ports, such as Saldanha Bay, Coega or Richards Bay, to facilitate the importation of LNG, and the generation of power at port areas using the country’s existing electricity grid for its distribution.
Gas-to-power is seen as a potential key to unlock an early start to the process, which is being driven by South Africa’s Department of Energy (DoE) as custodian of procurement for independent power producers (IPPs).
“We’re looking at how we will participate in that,” Sasol VP business development power and gas Kribs Govender told a media roundtable attended by Creamer Media’s Engineering News Online.
Johannesburg- and New York-listed Sasol, which is already using its own gas to generate 440 MW of low-carbon power into the South African electricity grid, is awaiting a DoE tender for the generation of 3 126 MW of gas-fired power, which is expected to be invited in the first half of 2016.
While imported LNG is envisaged as the key initial enabler, over time indigenous gas discovery is expected to make inroads and gas pipeline reticulation created to allow gas to feature in South Africa’s currently coal-dominated energy mix.
Led by Sasol executive VP energy Maurice Radebe, the team of Sasol top brass at the roundtable included senior VP exploration John Sichinga, investor relations head Cavan Hill and VP electricity, gas and liquid fuels marketing Thabiet Booley.
Sichinga outlined how Sasol’s strategy had shifted away from coal – more than 40-million tons of which are still used a year to produce petrol, diesel and chemicals – and how Sasol had pioneered the monetisation of Mozambique gas in Southern Africa.
More than 26 000 of Sasol’s 31 000 personnel are employed in the Southern African region, which contributes R96-billion to the company’s yearly revenue line.
The 65-year-old company, which operates in 37 countries, turned over R185-billion in its 2015 financial year.
Its upstream strategy is to deliver low-cost feedstocks and it anticipates significant growth from its existing hydrocarbon assets.
Sasol has gas production positions in Mozambique, Gabon and Canada and is exploring for gas in the Atlantic and Indian oceans offshore of South Africa.
It has an upcoming integrated oil, liquefied petroleum gas and gas development in Mozambique, two licence-award confirmations close to its existing onshore infrastructure in Mozambique and exploration assets in Australia and Canada.
On the chances of gas outpacing coal, oil and nuclear, Hill said in response to Creamer Media’s Engineering News Online that it would come down to availability, price and cost of production.
South Africa has an abundance of coal resources and currently limited natural gas resources.
With Sasol having been unsuccessful with gas in Namibia and coal-bed methane in Botswana, its current focus is on finding gas in Mozambique and South Africa.
Whether or not gas can outpace coal is thus dependent on finding the gas at economic cost and being able to use the gas for heat or the generation of power.
As gas still has to be found domestically, open to South Africa as a country is to start importing LNG, which is being studied by government.
A draft of the government’s Gas Utilisation Master Plan (Gump) for industry comment is awaited.
In addition to Gump, the DoE’s programme for 3 126 MW from IPPs is targeting LNG as the basis for its feedstock, in anticipation of exploration being successful in finding indigenous natural gas.
LNG is thus potentially an early ticket to start stimulating the economy through gas-based industrialisation, Govender outlined to Creamer Media’s Engineering News Online in an interview.