Page 72 - Vol 32 Issue 33 2121

oil insight

How Liquefied Natural Gas could

change South Africa’s fortunes

By Marie Blanche Ting, Doctoral researcher, University of Sussex

he development of liquefied natural increasingly greater role for liquefied gas. They include:
gas (LNG) could help transform the natural gas in the country’s energy mix • energy diversification and security to
TSouth African economy, spur re- and the overall economy, both as a clean reduce the country’s dependence on
industrialisation, reduce the country’s alternative energy source and as a spur to coal for electricity;
over-reliance on coal-fired power stations, industrial development.
and contribute to increased regional The southern African region, specifically • reduction of Green House Gas
trade. Mozambique which already has a pipeline emissions;
South Africa has in recent years run into to South Africa, could be the major • provision of flexibility to the
electricity shortages, forcing the country’s supplier of gas to South Africa. introduction of renewable generation
utility to burn expensive diesel to keep the In my recent research I argue that to into the electricity grid; and
lights on. A major polluter, the country develop a liquefied natural gas sector • facilitating the development of
also relies on coal to generate almost 90% South Africa could re-purpose existing provincial industrial hubs and regional
of electricity. On top of this, South Africa institutions, namely those relating to the trade within the Southern African
has lost its manufacturing competitive country’s established liquid fuels industry. Development Community.
edge, which was built on relatively cheap
electricity and behind protective trade The research traced the evolution of gas Three phases of gas development
walls. Electricity prices have increased developments in the country from 1998 to South Africa’s history with gas can be
substantially over the past decade to pay 2018. It found a close interaction between delineated into three periods. Firstly,
for the power utility Eskom’s two new the electric and the liquid fuels sectors. At from 1998-2005, South Africa significantly
coal-fired power stations. present gas contributes about 3% to the reformed its energy sector. This included
country’s primary energy mix, but there the 1998 white paper on energy, which
Liquefied natural gas could change are indications that it will feature more
South Africa’s fortunes. And government prominently over the next decade. recognised natural gas as an option to
recognises this. Policy developments diversify the country’s energy mix. In 2001
in recent years have factored in an There are number of reasons for pursuing the Gas Act was implemented, facilitating
the development of
gas infrastructure in
LNG shipping vessel the country through
pipelines and the
regulatory framework.
Significantly, in 2004,
a pipeline between
Mozambique and South
Africa began pumping
gas. Sasol, a dominant
player in the country’s
liquid fuels industry,
was behind the 865
km gas pipeline. While
the majority of gas
transported through
the pipeline goes to
Sasol, the pipeline has
nonetheless created
demand to around
370 industrial and
commercial customers
via 530 off-take points.
The second phase
covers 2006 - 2012.

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