With gas opportunities arising owing to recent discoveries and Africa suffering from an ongoing energy deficit, management consulting company Kearney metals and mining global lead Igor Hulak says gas provides a “viable opportunity” to decrease dependency on coal.
“Natural gas will remain a critical element of the global energy portfolio, as Southern Africa navigates the energy transition to address climate change and intends to provide electricity to more than 600-million people currently going without.”
Speaking during a panel discussion, which he moderated, at this year’s Africa Gas Forum, Hulak said new gas discoveries, coupled with an enabling environment, were “critical to the region’s success” if it was to compete on a level playing field with global competitors.
Related to this, Standard Bank Southern Africa oil and gas head Paul Eardley-Taylor commented that industry movement towards disposals – like petrochemicals company Sasol’s recent disposal of individual assets – will “likely free up the gas infrastructure sector” and promote the availability of feedstock to South Africa.
However, oilfield services company Schlumberger Nigeria and West Africa business line manager Mervin Azeta warned that, without anchoring the demand, the development of natural gas resources would be difficult.
“Beyond gas-to-power applications, which are central to the region’s economic future, Southern African countries could leverage the regional gas finds for the industrial, transport and commercial sectors, both in the short and long term,” she said.
Using gas in these industries will allow for the maximum use of gas resources, though Azeta noted that there is a strong focus on gas-to-liquids and gas-to-chemicals, especially liquefied natural gas (LNG), “which has huge exports and inter-regional trade potential”.
There was also increasing demand for cheaper, cleaner and healthier fuel sources for rural consumers, especially, and a push to decarbonising domestic heating needs, she added.
However, from a green hydrogen perspective, Green Hydrogen Solutions founder and CEO Ebrahim Takolia said “hydrogen will take some time before it becomes more mainstream, but it will have an effect on the ammonia value chain, which can also be used for fertilisers, heating and cooling, where you can optimise heating from electrolysis together with heating from the use of hydrogen”.
He added that oxygen shortages in South Africa's industrial sector, as were recently experienced because of the Covid-19 pandemic and the rerouting of oxygen to the medical sector, could be avoided in future through using hydrogen, which produced oxygen as a by-product.
Considering that this could have a significant impact, Takolia noted that there were other opportunities to optimise natural gas use with hydrogen through, for example, combining hydrogen with natural gas and making synthetic methane, from where carbon can be sequestered and used in other industrial processes.
“If you look at some of the technologies that are evolving in this space, there are significant synergies between the two gases to decarbonise the natural gas emissions over time, and as the costs become more competitive,” he commented.
All of this suggested that more natural gas was needed in Africa and Southern Africa, which Integrated Energy practice leader Jennifer Zeiss agreed with, noting that “it’s clear that opportunities for natural gas are going to be regional, because we need scale to develop all phases of that value chain”.
However, she said this would require “aggregation at a regional and national level” and that distributorships would need to be integrated into smaller-scale gas markets.
“There have been technological shifts in small-scale delivery mechanisms and that’s going to be making those virtual pipelines viable going forward,” she elaborated, noting that that could then enable the downstream market’s development without needing to spend a lot of money or using high-capital infrastructure developments, “especially now in the beginning of the market’s development”.
She suggested the use of a strategy which, in the short-term, would result in the development of low-hanging fruit while lowering the risk to gas delivery mechanisms; and in the long-term, would see regional aggregational models develop economic corridors.
“Industry will play a very important role in the facilitation of that and in moving to the future. We need to take cognizance of that and have a full comprehension of what that energy future will look like,” Zeiss said.
In terms of the strategy to employ for the value chain, Takolia suggested the use of a bespoke model, which is how gas distribution evolved in other areas of the world.
“I think South Africa is a significant energy user and that it has all the right ingredients to transition to a gas economy”.