South Africa proposes buying U.S. LNG as it seeks trade deal
- Trade package was proposed during Ramaphosa's White House visit
- Package also includes duty-free proposals for South African-made vehicles and auto parts
South Africa has offered to buy liquefied natural gas (LNG) from the United States over a 10-year period as part of proposals to secure a trade deal, according to a ministerial statement posted on the South African government news agency website.
The document, signed by Minister in the Presidency Khumbudzo Ntshavheni and posted late on Sunday, said that South Africa aims to import 75 petajoules (pJ)–100 pJ, roughly 75 MMm3–100 MMm3, of LNG per year from the United States, the world's biggest LNG exporter.
The minister said that would "unlock approximately $900 MM to $1.2 B in trade per annum and $9 B–$12 B for 10 years based on applicable price."
The trade package was proposed by South Africa during President Cyril Ramaphosa's visit to the White House on May 21, when President Donald Trump confronted him over government policies, such as land reform and Black economic empowerment, and made false claims of a "genocide" against whites.
Ramaphosa had hoped to use the meeting to reset his country's relationship with the U.S., after Trump cancelled much-needed aid to South Africa, offered refugee status to white minority Afrikaners, expelled the country's ambassador and criticized its genocide court case against Israel.
Ntshavheni, a senior member of the government who is also the cabinet spokesperson, was part of the government delegation that accompanied Ramaphosa to Washington.
She said South Africa would work with the U.S. to explore areas of cooperation in technologies, including fracking, to help unlock gas production in South Africa.
The proposed package also includes a duty-free quota of 40,000 vehicles per year to be exported from South Africa and duty-free access for automotive components sourced from the country for production in the United States.
A duty-free quota of 385 MM kilograms (kg) for steel per year and 132 MM kg of aluminum per year was also proposed, according to the document.
Ntshavheni said LNG imports would be augmented with U.S. investment in gas infrastructure, as Africa's most advanced economy pivots towards natural gas and away from coal-fired power stations.
Trump, who unleashed global trade tensions by announcing tariffs on all of his trade partners last month, has made energy one of the bargaining chips.
For South Africa, which imports most of its gas via a pipeline from Mozambique, and could run out of gas within a few years as its neighbor's supplies dwindle, U.S. LNG would fill a need.
South Africa's Karoo region is thought to hold significant quantities of gas but a moratorium on shale gas exploration over environmental concerns has held up exploration in the area.
"(South Africa) and the U.S. will negotiate an arrangement to facilitate LNG imports from the U.S. at the appropriate price. This will not replace our current suppliers of gas but complement those supplies," Ntshavheni said.
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