Cheniere urges South Africa to import US LNG for power needs

9/30/2015

By PAUL BURKHARDT
Bloomberg

Cheniere Energy, the Texan liquefied natural gas (LNG) company planning to start exports this year, urged South Africa to consider US supplies as it adds gas to its energy mix.

Cheniere “would be delighted to talk to developers” in South Africa, said Renato Pereira, vice president of origination and marketing for the Americas. US LNG supply “is coming and it’s coming fast.”

The US, the world’s largest gas producer last year, is eyeing potential markets for its fuel. Cheniere has been at the forefront of turning the country into an LNG exporter, with the first shipments due in December. That positions the Houston- based company as a possible supplier to South Africa, which is pushing gas as an alternative to coal for power generation.

Cheniere has already contracted its planned capacity of 40 million tpy, yet that doesn’t preclude resale to South Africa, Pereira said Wednesday at a conference in Cape Town. The country will require about 3 million tpy for its power-generation program, he said.

South Africa’s measures to tackle a power crisis that has curbed economic growth to the slowest pace since 2009 include an invitation to private companies to supply 3,126 megawatts of gas-fired generation. It’s currently discussing ways to price gas imports to ensure they compete with other fuels.

The country could use the US benchmark Henry Hub index in Erath, Louisiana, to price gas, Pereira said.

“This is a good time to be looking at LNG” since competition between global suppliers is “fierce,” he said.