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Sasol’s plans to replace coal with LNG put on hold

Sasol Secunda

Sasol Secunda

Photo by Creamer Media

26th September 2023

By: Darren Parker

Creamer Media Contributing Editor Online

     

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JSE-listed energy company Sasol has placed on hold the implementation of its planned additional gas reforming capacity at its Secunda plant, in Mpumalanga.

Speaking at an investor site visit on September 22 in Secunda, Sasol environmental sustainability VP Sarushen Pillay said that the decision was made owing to changes in the attractiveness of the liquid natural gas (LNG) markets.

Initially, the company considered using LNG to reduce its reliance on coal while maintaining plant production levels. In the company's 2021 decarbonisation roadmap, Sasol stated that it believed the LNG market was an attractive option for reducing its coal use.

However, after evaluating the possibility of using about 40 to 60 petajoules of LNG to replace some of its coal inputs, the company decided that commodity pricing had become too high following geopolitical events over the last few years.

Additionally, the capital estimate for the medium gas pathway, which would include new reformers, had increased owing to high global inflation. This led to the decision to put the implementation of additional gas reforming capacity on hold.

Pillay mentioned that the company would continue to revise the economics, and the gas-heated exchange project could be reconsidered if the market improves. However, for the current period, Pillay confirmed that Sasol does not consider additional gas as a viable option.

Nevertheless, the company still aims to reduce its reliance on coal by 2030 by a factor of about 10-million tonnes a year.

Pillay mentioned that Sasol aims to increase the capacity from its own gas fields, hoping to bring in more gas to fill the gap created by reducing coal use.

"That's one of the key reasons why we want to retain our gas and use it as much as possible for our own production," Pillay said.

Regarding renewable energy, Pillay stated that Sasol remains on track to procure about 1 200 MW of renewable energy by 2030. So far, integrating renewable energy has allowed the company to reduce its greenhouse gas (GHG) emissions by about 6%.

Pillay also mentioned that more than 600 MW of renewable energy power purchase agreements have already been signed for Secunda operations.

Currently, 69 MW of renewables are under construction for Sasolburg. These Sasolburg renewable energy projects should be online by March next year, he explained.

To date, about 3 MW of photovoltaic solar power have been commissioned in Sasolburg.

Further, the feedstock transition will contribute to about a 12% reduction in GHG emissions, with coal briquetting being a solution for fine coal advancement.

Moreover, Sasol's Mozambique gas supply has been prioritised, even though the introduction of LNG is not viable at the current pricing.

Boiler adjustments and energy efficiency have also contributed to about a 12% reduction in GHG emissions, with the first boiler adjustment planned for 2025.

Pillay explained that a suite of other energy efficient projects is also progressing, with innovative low-carbon and steam options being explored by the company's research and technology division.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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