South Africa sees natural gas as key to reducing dependence on coal

By PAUL BURKHARDT
Bloomberg

South Africa, the most industrialized nation in Africa, said natural gas will become a key power source in its plan to reduce dependence on coal.

“Gas will be a cornerstone of baseload” electricity, Energy Minister Tina Joemat-Pettersson said Tuesday, referring to power generated around the clock. “Our vision is that gas will play a significant role in delivering timely, reliable and affordable electricity.”

The government is pushing to add gas to South Africa’s energy mix as coal-fired electricity production -- accounting for more than three-quarters of the total -- falls short of demand, causing power cuts nationwide. With scant proven gas reserves of its own and virtually no gas-fired generation, the country will need to build infrastructure to import, transport and burn the fuel.

“Our key challenge is how to bring the benefits of natural gas as an energy source as early as possible,” Joemat-Pettersson said at a conference in Cape Town.

Power Plan

Government measures to tackle the 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.

Sasol is among firms to show an interest in the state program. The fuel maker’s involvement could include sourcing liquefied natural gas (LNG) or constructing import facilities, David Constable, CEO of the Johannesburg-based company, said in a Sept. 7 interview.

“In the case of South Africa, there is no natural-gas infrastructure, so you need to build it” along with the power plants that run on the fuel, said Gonzalo Ramirez, director of business development for LNG provider Excelerate Energy. The company could have a floating regasification vessel ready for South Africa within two years, he said.

With global LNG supplies booming and a raft of new export projects preparing to start, it’s a good time to be buying.

“The foreseen LNG glut is catching the attention of a lot of new markets,” Ramirez said. “One of the markets that we are seeing -- and it’s very interesting because of the power-demand potential -- is Africa.”

• Most Read
• Most Commented