South Africa looks to Mozambique, others for gas
Battling with energy shortages, South Africa is looking to gas-rich Mozambique and its shale gas resources as it plans to allow higher level of gas into its coal-heavy energy mix.
The country, which is facing an imminent energy crisis as demand outstrips supply, source about 77 percent of its current electricity from coal, while natural gas accounts for just 3 percent of the country’s energy mix.
The country requires increased generating capacity not only to meet current demand, but also to meet future economic growth as well as replace old power stations whose coal reserves will soon be exhausted.
Tina Joemat-Pettersson, South Africa’s energy minister, in her energy budget speech last week, said natural gas, including shale gas, and nuclear should play a greater role in the country’s energy mix.
The newly appointed minister said she planned to finalise the frameworks to allow higher levels of gas and nuclear in South Africa’s coal-heavy energy mix.
“With regard to the development of our gas resources, including the regional gas opportunities in neighbouring countries and our own shale gas resources, a draft of the gas utilisation master plan is being finalised, and will be taken through Cabinet before starting with stakeholder consultations,” she said.
The lack of infrastructure, including pipelines and storage facilities had made it difficult for gas to play a role in the country’s energy mix, she said. That was despite the discoveries of gas in neighbouring Mozambique, Tanzania, and off South Africa’s west coast.
The much-anticipated gas utilisation plan would outline the infrastructure necessary to open up the gas market to residential and industrial sectors, Joemat-Pettersson said.
The plan’s scope includes “investigating the development of gas-receiving and storage terminals for LNG, and to meet the gas-to-liquids requirements at Mossel Bay refinery, as well as investigating the conversion of Eskom’s diesel plants,” she said.
“The gas infrastructure development effort is accordingly premised on regional integration with Mozambique in the east, the importation of LNG and the networking of various load centers for transporting and storing shale gas in the Karoo,” she said.
In addition, the department of energy will soon release the outcome of a gas feasibility study, being completed in collaboration with Transnet, state-owned PetroSA and the state utility, Eskom.
“The prospect for gas to replace imported crude oil in the transport sector is very high on the government agenda because it bodes well for our macroeconomic outlook, particularly in our balance of payments. In the future, gas is likely to be the most common energy carrier for public transport, freight and domestic heating and cooking,” Joemat-Pettersson said. South Africa has limited oil reserves and imports nearly all of its crude oil requirements from the Middle East and Africa.
The US Energy Information Administration estimates the potential shale gas resources in South Africa to be around 485 trillion cubic feet, which is about the fifth-largest reserves of shale gas in the world. As a cheaper way of meeting future electricity needs, and a relatively smaller carbon footprint, shale gas could well be a long-term solution to South Africa’s crippling power situation.
Joemat-Pettersson said the department of energy had “no intention of abandoning” coal, but that it was “determined to find cleaner technologies that will reduce the adverse environmental impact associated with greenhouse gas emissions from coal generation.”
FEMI ASU