South Africa Must Learn from Mozambique, says Sasol

South Africa is ten years behind its neighbour Mozambique in moving to a gas economy, and must build on Mozambique’s experience for its own development.

This was the message on July 13 from the CEO of the South African Oil and Gas Alliance (SAOGA), Niall Kramer, at a breakfast meeting in Johannesburg.

“I can’t think of a better example for creating a gas economy,” he said, after hearing a presentation on the gas activities of synfuels and chemicals giant Sasol. “What are the lessons that we can learn?”

Sasol Vice President for Business Development, Power and Gas, Kribs Govender, had given the presentation to the SAOGA breakfast gathering, explaining how a portion of the gas which Sasol is producing from fields in Mozambique is sent by pipeline to its two major South African facilities at Secunda and Sasolburg, and also sold to third parties.

Sasol Vice President for Business Development, Power and Gas, Kribs Govender (Photo credit: Govender / LinkedIn)

He stressed that a key question which needs to be addressed for new gas developments within South Africa is where the gas will be used. The South African government is soon to unveil details of its plans for procuring a floating storage and regasification unit (FSRU), which would be sited at Richards Bay, Coega or Saldanha Bay.

“Current thinking is that imported LNG will start the power process,” explained Govender. He also suggested that more effort is needed to develop the natural gas resources which lie off South Africa’s coast. “Exploration will help to allow a move from imported to indigenous gas,” he said. “We need to use imported gas as an anchor and build on that.  Government must create an enabling environment.”

The expected immediate customer for the new FSRU is likely to be a power station, and the construction of this is expected to be an add-on option in the state tender.

While industrial customers are likely to be serviced, Govender said it would not be feasible to develop a coastal chemicals plant as a customer for imported liquid petroleum gas (LPG). “The likelihood of developing a chemical facility based on imported gas are very slim,” he argued.  “The numbers don't stack up.”

He said a 50-year vision is needed, developing gas supply through a number of hubs.

Kramer agreed that new developments based on imported LPG could switch over to using new supplies of natural gas, if these can be brought on stream. “My hope is we do find indigenous gas,” he said.

Earlier, Govender had explained that Mozambique is a heartland for Sasol, with gas from the Pande and Temane fields being used both in Mozambique and South Africa. Sasol is busy with a 13-well development project adjacent to its existing operations, and Govender said an immediate use for extra supplies from an expansion would be in a new 400-MW power station next to the existing processing facility, which could be commissioned around 2020-2022. 

Gas from Sasol is already supplied to a power station at Ressano Garcia, Mozambique, which is close to the border with South Africa, and which began operating in February 2015. “We don’t want to do everything in South Africa,” he stressed.   

John Fraser, Johannesburg