Momentum is building for an expanding gas industry in South Africa, with government officials promising that they are turning their attention to gas as a critical form of energy. But industry players have called for certainty.

The inaugural South African Gas Options conference in Cape Town heard on Tuesday that the large-scale potential of South Africa’s recoverable gas resources indicated nine-trillion cubic feet (tcf) offshore through conventional exploration drilling; nine tcf from Karoo shale and 1.5 tcf from coal-bed methane (CBM).

“This is more than 100 years supply of the present annual gas volumes from Mossel Bay and the [Republic of Mozambique Pipeline Company] pipeline together,” said Department of Energy deputy director-general of electricity policy, planning and clean energy Ompi Aphane.

But he added that this was a hypothetical figure, as the process required drilling and evaluation. He estimated that it would take eight years before any significant volumes of shale gas were available in South Africa. 

Aphane was upbeat about prospects for gas as an important source of energy and said government was keen to make headway on the plan.

“The Integrated Energy Plan indicates there’s lots of space for gas utilisation. 3 126 MW has been set aside in terms of the Electricity Regulation Act, but that was three to four years ago, so you are likely to see more in the future.”

He said the department was looking at the different sources of gas potentially available – from conventional gas (either local or imported by pipeline), liquefied natural gas (LNG), compressed natural gas or liquified petroleum gas, as well as unconventional gas in the form of shale gas, CBM and synthesis gas, or syngas.

Apart from using gas for energy, Aphane said South Africans needed to have a mind-shift.

‘South Africans use electricity for everything, including cooking and heating. We see that paradigm shift as having to change. It’s also about providing gas for new industrial uses.”

On pricing, he said the government had to overcome the challenges of imported LNG.

“We are aware of the pricing situation out there today. We need to ensure that pricing does support LNG imports, as well as infrastructure.”

He said the gas price also needed to compete favourably with other domestic sources of energy.

Head of energy for Nedbank Sakkie Leimecke said the private sector needed certainty.

“We expect the gas programme to be very complex. We need a single point of contact to facilitate all government engagement. We also need a very clear programme of what government expectations are and what government will support. Companies find it very difficult to adapt when something changes midstream.”

ACWA Power CEO Paddy Padmanathan explained that it was very important to establish the rules both for the private sector and government, and ensure they were rigorously administered.

He said companies had difficulty dealing with State-owned enterprises (SOEs).

“We have a port interface, pipeline interface and Eskom. We find dealing with SOEs very challenging because they don’t deliver on time and they don’t deliver [in accordance with] rules. We are looking for certainty on the rules you set. We will partner with SOEs. We will price for it, but if we don’t see the rules of engagement well defined and the risks manageable, we will not participate.”

Despite challenges, delegates to the conference said they were excited about the prospects for the gas industry in South and Southern Africa.