Mineral Resources and Energy Minister Gwede Mantashe has urged foreign investors to invest in South Africa’s first liquefied natural gas (LNG) hub, in the Coega Industrial Development Zone, in the Eastern Cape.

Mantashe made a firm plea to investors during the opening of Africa Oil Week, in Cape Town, on Tuesday.

"Investors at this conference should take the opportunity to engage with our officials. Here is an opportunity not only to invest, but also to help develop the gas industry in this country.”

South Africa’s Integrated Resource Plan 2019 (IRP 2019) makes provision for gas-to-power projects.

“The Coega Special Economic Zone (SEZ) site, the first LNG import terminal, will lay the foundation for new gas-to-power plants. It will also see the conversion of existing power plants from diesel to gas. We also intend to use that location as a base for importing feedstock for the gas-to-liquids refinery in Mossel Bay,” Mantashe told delegates on the opening day of Africa Oil Week.

He said the framework for supporting the programme would be announced by his department shortly. An amendment to the country’s Gas Act, would also be tabled in Parliament soon.

On the upstream front, Mantashe said work was under way on the Petroleum Resources Development Bill, which would be tabled before Cabinet soon.

Mantashe said gas-to-power technologies would provide the flexibility needed to complement intermittent renewable energy and to meet demand during peak hours.

“While in the short term the opportunity is to pursue gas import options, local and regional gas resources will allow for scaling up within manageable risk levels,” the Minister told delegates.  

Mantashe said the government was also considering the options of indigenous gas, like coalbed methane, and ultimately, locally recoverable shale and coastal gas. 

He said the government had noted global industry shifts and was encouraged that many countries in Africa were considering entering the global gas market and promoting the development of a domestic and regional gas market.

Mantashe said natural gas could improve the efficiencies of many industries currently using sub-optimal fuel sources in their production processes.

“Our gas must power plants and other petrochemical facilities in our countries as it reaches for export markets. This will ensure that we do not always import beneficiated hydrocarbons.”

Mantashe said he noted the major gas finds in Mozambique and Tanzania with a sense of admiration.

“We remain patently aware that one of the oil companies in South Africa played a pivotal role in the monetization of the earlier gas finds in Mozambique.”

BRULPADDA
The government is also keeping a close eye on the hydrocarbon find, named Brulpadda, by Total and its partners off the Mossel Bay coast earlier this year.

“We are confident that this find will spur further interest in the upstream potential of South Africa.”

Mantashe also commented on other energy sources within the recently released IRP 2019, and pointed out that coal and nuclear would continue to be an important part of the country’s energy mix.

The IRP 2019 provides for the extension of the design life of the Koeberg power station near Cape Town, as well as additional new nuclear capacity in the future.

“Koeberg is the only nuclear power station on the continent. It is doing well. It is efficient, reliable and cost-effective. We are looking at extending its lifespan for another 20 years,” the Minister told the conference.  

He said, globally, there was a shift towards the development of small, modular reactors compared to a large fleet approach.  

Mantashe also said coal was here to stay for some time.

“There is a strong debate to say coal must disappear. It will disappear over time, but not soon. We have a more than 30 000 MW portfolio of existing power plants, and an abundance of the resource.” He said new investments would be directed towards more efficient and environmentally responsible coal technologies, including underground coal gasification and carbon capture and storage.

As around 1 800 senior oil and gas executives gathered for the conference, Extinction Rebellion protestors gathered outside the Cape Town International Convention Centre. The demonstrators, some in hazmat suits, protested against fossil fuels. They called on governments to declare a climate emergency and to ban all planned projects in fossil fuels, as well as fracking in the Karoo.