Gas Megahub project
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South Africa recognises the energy and mineral resources sectors as catalysts to economic growth, said the Minister of Mineral Resources and Energy, Gwede Mantashe.

“We have witnessed how an adverse impact of high costs and unreliable supply of energy have on the productive sectors of the economy,” added Mantashe while delivering a keynote address at the underway Africa Oil & Power in Cape Town.

In this regard, the minister said the department believes that lowering the cost of energy should be a major area of focus in order to enable the growth of the extractive and manufacturing sectors. 

Resource extraction requires vast amounts of energy. Therefore, when electricity costs are high, sustaining investment in resource extraction becomes a challenge.

“We are about to conclude our Integrated Resource Plan (IRP). The Plan will lay the foundation for investment in power generation in the country. Such an investment should have the impact of lowering the cost of doing business in the country,” said minister Mantashe.

Read more about the IRP

Diversifying energy mix

Mantashe said his department recognises the importance of all energy carriers in the energy mix.

He then stated that the IRP makes provision for gas to power projects, adding that there will be an amendment of the Gas Act of 2001, which will be tabled in Cabinet soon.

“We have already announced that the Coega Special Economic Zone (SEZ) will be the site of the first LNG import terminal. The site will lay the foundation for new gas-to-power plants. It will also be the point of converting existing power plants from diesel to gas. We further intend to use the location as a base for importing feedstock for the GTL refinery in Mossel Bay,” he said.

Mantashe pointed out that Africa is endowed with fossil fuels “which we cannot abruptly stop using.”

“We are not consumed by denialism when it comes to challenges of climate change. We subscribe to the approach of a just transition towards cleaner forms of energy,” the minister said.

On the regional front, he pledged South Africa’s support for the major gas finds in the eastern part of the continent, especially in Mozambique and Tanzania.

He said South African will contribute to the development either through the importation of gas or the importation of electricity generated by gas. 

Read more about gas developments

Improving access to modern energy forms

Mantashe also made a call that the gas that is being discovered in African countries must not only be destined for exports but should also find its way to the power plants and other petrochemical facilities.

“This will ensure that we do not always import beneficiated hydrocarbons. The gas endowment must be translated to improved access to modern energy forms by consumers in this continent of ours, as envisaged in the African Union’s Agenda 2063. The gas should also be able to attract investments in economic activity including manufacturing, which in turn creates the necessary jobs,” he urged stakeholders.

In conclusion he said: “We are encouraged that many African countries have set themselves the vision to enter the global gas market; and to promote the development of a domestic and regional gas market.”