Photo by: Duane Daws
Transnet has assured investors that it is well advanced in planning for three of its ports to cater for the development of a gas-to-power industry in South Africa.
Transnet group executive for planning and strategy Mark Gregg-MacDonald said the timelines to support investment in gas facilities at the ports were achievable.
“We are preparing South Africa’s port system to ensure cost effective, efficient, safe and environmentally responsible facilities for gas imports, storage and transmission,” he told delegates attending the South Africa Gas Options conference, in Cape Town.
Transnet is working with the Department of Energy (DoE) Independent Power Producer (IPP) Office to help expedite the 3 126 MW Ministerial determination for gas IPPs.
Three ports had been earmarked for development to cater for the gas industry in South Africa – Ngqura, in the Eastern Cape, Saldanha, in the Western Cape, and Richards Bay, in KwaZulu-Natal.
Gregg-MacDonald said the best sites for both short-term and long-term options for gas development within each port had been identified, with multicriteria analysis and environmental studies already under way.
He told delegates that Transnet was preparing for two options – floating power plants to be berthed at the ports and land-based regasification facilities and gas transmission infrastructure in the long run.
Transnet was looking at studies on servitudes, connection to the Eskom grid, the regulatory environment and environmental studies, besides other considerations.
With plenty of legislation to be complied with, comprising six major Acts, including the Gas Act and National Energy Act, permitting and licensing alignments are likely to take some time.
“If we want to do this quickly, there needs to be a collaborative approach,” Gregg-MacDonald suggested.
He said Transnet had been preparing a business case which executives would discuss with the Transnet board and Energy Minister Tina Joemat-Pettersson. He said the information would be ready before the keenly awaited request for proposal (RFP) goes out to potential investors.
DoE acting director-general Wolsey Barnard said the department planned to release the first RFP for gas before the end of this year.
“It won’t be a big bash RFP. It's a phased process,” he said.
As part of Transnet demand planning this year, a McKinsey study outlined various scenarios for supply and demand in the gas sector in line with the expanded Ministerial determination for Gas-to-Power under the Integrated Resource Plan (IRP) 2015.
Gregg-MacDonald explained the Moderate Gas Scenario to delegates. In this scenario, the gas sector would be dominated by Gas-to-Power, domestic offtake would mature to credible volumes and there would be regionally-specific piped gas distribution.
Transnet has said specific locations in the ports system would need to be offset by ensuring common-user access and scaleability over time, while infrastructure has to be regulated by the National Ports Act and the National Energy Regulator of South Africa.