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SA should consider investment in regional gas infrastructure

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Johannesburg, South Africa — ESI-AFRICA.COM — 31 October 2011 – South African energy players like government, Transnet, Eskom and oil companies need to invest urgently in gas infrastructure on a large scale if they are to derive benefit from the recent massive gas finds in Mozambique.

This is the view of Anton Botes, leading oil and gas industry partner at the Deloitte audit group, who said the gas reserves discovered in Mozambique so far almost equalled the total production capacity of all of South Africa’s fuel refineries. Furthermore, the country’s fuel and electricity supply industry capacity was at its peak.

Sasol wants to expand its gas to liquids (GTL) technology. It imports gas from Mozambique along a pipeline from the Pande and Temane gas fields.

The Italian group Eni, which announced the biggest gas discovery in its existence in Mozambique last week, has increased its estimate of those gas reserves by 50% to 22,500 billion cubic feet. This is enough to keep 22.5 plants like PetroSA’s GTL facility in Mossel Bay – which can deliver 45 000 barrels of fuel a day – going for around 20 years.

Botes said South Africa would be smart to make a serious investment in gas infrastructure. Countries that have already developed a strong gas infrastructure have invested in entry points for liquefied natural gas (LNG), pipelines, GTL plants and gas-fired power stations.

PetroSA’s plans for a floating LNG offloading facility costing almost R2 billion in Vleesbaai close to its southern Cape facility, were forestalled by the environmental concerns of the tourism region’s inhabitants. PetroSA spokesperson Thabo Mabaso responded to enquiries saying that the state-controlled energy group was not currently considering new plans for an LNG offloading facility, but would certainly consider importing natural gas from Angola and Mozambique if the infrastructure existed.