Shift in South Africa’s energy industry

11441208065 dac48cb280 zSouth Africa currently consumes around 180bn scf of gas per year and is heavily reliant on imports to meet demand. (Image Source: Duke Energy/Flickr)South Africa is set to increase its gas imports and explore new domestic reserves as the industry shifts away from coal-fired power towards natural gas

The South African government is aiming to increase gas imports to meet the country’s growing energy needs. The country currently consumes around five billion cubic metres of gas per year, with two-thirds of this being imported from neighbouring Mozambique.

A new 2,600 km pipeline is planned to strengthen the supply of gas in the country. South Africa’s SacOil Holdings has announced an agreement with Mozambique’s national oil and gas company, Profin Consulting and the China Petroleum Pipeline Bureau (CPP) to construct a US$6bn natural-gas pipeline from the Rovuma Basin in northern Mozambique to South Africa’s Gauteng Province, with offtakes to other neighbouring South African Development Community countries.

Efforts are also in place to identify and develop new domestic reserves. The government recently announced plans to add 3.1GW of gas-fired generation capacity by 2025, compared to a total of 1.35GW at present.

Efforts to commercialise the Ibhubesi gas field, located 105km off the coast of North Cape Province, are also underway. Last year Australia’s Sunbird Energy, which holds a 76 per cent stake in the joint venture alongside national oil company PetroSA, signed an agreement with the public electricity utility Eskom. According to the agreement, when production at Ibhubesi comes on-line in 2018, Eskom’s Ankerlig power stations will take delivery of 30bn scf of gas per day for up to 15 years.

Apart from this, exploration efforts are also progressing in Saldanha Bay, where 14 oil and gas exploration licences have been issued for blocks off the coast. Discovery and drilling in the area could help fuel development of the nearby industrial development zone.

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