Minister outlines 2016/17 gas IPP, FSRU procurement plans

18th May 2016 By: Terence Creamer - Creamer Media Editor

Minister outlines 2016/17 gas IPP, FSRU procurement plans

Energy Minister Tina Joemat-Pettersson indicates that the procurement processes for the gas-to-power (GTP) programme and associated gas infrastructure will begin taking shape during the course of the 2016/17 financial year, with a request for proposals scheduled for the fourth quarter. Government’s financial year ends on March 31, 2017.

She reports that a request for qualification for the supply of a floating storage and regasification unit (FSRU) and associated GTP solution of up to 3 126 MW will be released in third quarter of 2016/17 financial year.

Three potential ports are being considered for the project, including the port Ngqura, Richards Bay and Saldanha Bay.

A preliminary information memorandum on the 3 126 MW GTP independent power producer (IPP) programme will be made available to the market in the second quarter of the 2016/17 financial year.

The Minister indicates that the full scope of the solution will include the FSRU, liquefied natural gas supply, the development of jetty and associated infrastructure and the construction of pipeline infrastructure to deliver gas from the FSRU to an initial gas IPP and potential desalination facility.

Surplus capacity on the FSRU and associated pipeline infrastructure will be available to serve additional gas offtakers.

The IPP Office has also released call for expressions of interest (EoI) from the private sector to partner with State-owned companies in the development of a 600 MW gas-fired plant, facilitated by an additional gas determination published with the concurrence of the National Energy Regulator of South Africa. Responses to the EoI are due on June 20.

“My department is hard at work to ensure bankability of the natural gas-to-power procurement programme for investors, affordability for gas users and the minimum fiscal exposure for government,” Joemat-Pettersson says.

The Department of Energy is also working with the Department o Trade and Industry to on a gas industrialisation policy and strategy. “This natural gas IPP programme will not only establish the delivery of the 3 726 MW of electricity capacity set out in the Ministerial determinations, but will also serve as a catalyst for the development of a gas industry in South Africa.”

Joemat-Pettersson reports that the development of a comprehensive ‘Gas Policy for South Africa’, which will guide developments towards a sustainable natural gas economy, is also a priority.

“The gas policy will facilitate the development of the South African natural gas industry and market through ensuring the establishment of anchor demand from gas-to-power through the IPP programme. It will provide context for our new Integrated Resource Plan as well as the future Gas Industrialisation Policy under development.”