Accelerating the importation of liquefied natural gas (LNG) could aide in the development of South Africa’s lacking gas infrastructure and bolster the nation’s aim of ensuring sufficient energy supply within the next three to five years.
As the country awaits the outcome of whether or not energy companies would be allowed to explore for shale gas in the Karoo, South Africa could narrow the energy supply gap on its coal-reliant and geographically uneven national grid in the short term by making use of imported LNG.
Speaking at the Gas Week conference, Shell South Africa LNG business development manager John Shoobridge said importing LNG could be a “fast-track solution” to meet South Africa’s energy needs.
“There is no doubt that shale gas would be a game changer, but what about the short term?” he asked, noting that shale gas development and output, if given the thumbs up, was eight to ten years away.
Replacing coal with gas was the “fastest and cheapest” route to reducing carbon emissions and building a gas-fired power plant was more than three times cheaper than a coal-fired plant, he said.
Further, South Africa needed to accelerate its “nearly nonexistent” gas infrastructure as it moved to kick-start domestic gas production.
Shoobridge explained that, worldwide, LNG demand was growing at 5% and the market was expected to double in size by 2020, while the number of countries importing LNG nearly doubled between 2010 and 2020.
“A robust LNG supply market provides security of supply,” he said, adding that the liquefied gas provided competitive alternative baseload power and displaced diesel-powered energy and new coal-fired plants.
It also complemented existing and future renewable power generation.
Shoobridge believed that, with a strong partner, South Africa could replicate Shell’s three-million-tonne-a-year offshore joint venture Floating Storage Regasification Unit, which was built within four years, in Dubai.
He identified Saldanha Bay, Coega, Mossel Bay or Richards Bay as potential LNG import hubs, with the potential of transitioning the loca- tions into export hubs ahead of shale gas production.
South African Oil & Gas Alliance executive chairperson Mthozami Xiphu told Gas Week delegates that, if South Africa moved to support LNG imports, which could occur within three to four years, it could start the process of expanding its market and deliver an opportunity to develop skills prior to the commercialisation of its onshore and offshore reserves.
He believed that, within five to seven years, South Africa could commercialise its onshore resources, weaning it of its reliance on imports, and within seven to ten years, it could commercialise its offshore resources.