Southern Africa holds enough natural gas reserves to effectively replace coal fired power plants and serve the region’s energy needs well into the future, says Dr Thabo Kgogo, CEO of SacOil.
According to Kgogo, including gas in the energy mix will help South Africa and the rest of the region to address the energy deficit that still hampers further industrial and economic development.
“The manufacturing, agriculture and general commerce industries have suffered tremendously over the last few years as a result of unreliable power supply. A stable, diverse energy mix will promote investor confidence in southern African projects and economies.”
Kgogo says the region’s energy deficit is not a result of a lack of natural fuel. “The current situation that southern African countries find themselves in can be attributed to poor planning and the centralised model of power generation. We need the political will from government to support, promote and nurture the natural gas industry.”
SA gas economy: Gas Industrialisation Unit (GIU)
Kgogo says the establishment of a Gas Industrialisation Unit (GIU) by the Department of Trade and Industry is a very positive step toward developing a viable gas economy in the region. “The development of a natural gas industry will help to reduce our dependence on coal for generating electricity and help to secure stable and more reliable sources of power generation.”
The GIU’s vision is to create further momentum for gas-to-power development, which ultimately includes scalable upstream and downstream industrialisation.
This would include the exploration of gas resources as well the production, processing and purifying of raw natural gas to further industrialisation in Southern Africa.
Kgogo says this will stimulate economic activity as some of the requisites will include the establishment of gas storage facilities, pipeline distribution networks and Gas-to-Power (GTP) plants. “This holds enormous possibilities for the design, engineering and manufacturing industries.”
Promoting enterprise development
In Kgogo’s opinion the success of a sustainable natural gas industry will rest not only on establishing a well-managed supply and distribution network, but also on appropriate policies, which promote enterprise development. “The political complexities of the region require careful policy development, planning and co-ordination in order to unlock the full potential of a regional gas economy.
He says although the large-scale importation from regional African sources is key to kick starting the gas industry, the South African government should not lose sight of the importance of supporting continuing domestic exploration and production activities.
“Policy should encourage cross-border supply to travel both ways, for instance, as much as South Africa is looking to procure natural gas from countries such as Mozambique, Tanzania and Botswana, South African IPP’s should be able to seamlessly supply energy back to its neighbours. This will widen the playing field and offer more opportunities to South African gas players.”
Ultimately the GIU aims to overcome power constraints and reduce carbon intensity to secure a more balanced energy mix. This means that the development of a natural gas industry will have a longer term effect on regional economies through deepening industrial development and attracting investment.