The Industrial Gas Users’ Association - Southern Africa (Igua-SA), says unlocking local and regional sources of gas is pivotal to help South Africa TACKLE the looming gas cliff that will place 75,000 industry jobs at risk.
A gas cliff is a significant and abrupt decline in the supply of natural gas, and South Africa is on the edge of one, as Sasol’s natural gas supply from Mozambique’s Pande-Temane project is expected to dry up by 2028 — bringing a halt to the primary energy source for an industry that accounts for up to R700bn in GDP.
The industry relies on natural gas as a sustainable source of power generation, with gas as an enabler for growth in the mining, glass, and steel industries.
Tabling the gas roadmap for South Africa, Jaco Human, Igua-SA CEO, warned that the country was running out of time as the gas cliff loomed.
While gas was among the energy SOURCES in the country’s integrated resources plan, there was no solution to the supply constraints.
“Many people are talking about the gas cliff kicking in in 2030 but the reality is that it kicks in at the end of 2026, if we don’t commit to alternatives. We will start edging over the cliff in 2030 because the development of infrastructure takes time,” he said.
Many people are talking about the gas cliff kicking in in 2030 but the reality is that it kicks in at the end of 2026, if we don’t commit to alternatives. We will start edging over the cliff in 2030 because the development of infrastructure takes time.
While Sasol has said it would provide alternative synthetic gas for 24 months, Human said this was “a very short time”.
Sasol said it will supply methane-rich gas from its Secunda operations to customers between July 2028 and June 2030 to enable a smooth transition to liquefied natural gas (LNG) as a long-term solution.
“While LNG import projects are still under development by Sasol and others, we are implementing an interim solution to ensure supply continuity,” it said on Friday.
Human sees imported LNG as the only bridging solution to the gas cliff. The plan relied on LNG from the east coast (Mozambique) as a bridge before it pivoted to piped gas from the west coast (Namibia and South Africa) on a large scale in the second half of the next decade.
“We envisage Namibia will have gas from 2033 onwards. The plan is to connect the network to Sasolburg. There is significant potential to generate cheap gas to power off piped gas,” he said.
Igua-SA, a lobby group for large-scale industrial users, called for urgent government intervention that will help push investment to ensure South Africa averts the cliff. Human estimates that an R80bn investment ($4.5bn-$5bn) will be required.
Igua-SA believes gas is an enabler for economic growth across sectors, including mining and manufacturing, and that the plan is the viable alternative to ensure the cliff is averted.
It wants the government to adopt a similar approach in gas that helped Eskom keep the lights on. It is calling for engagement on a task team and project level.
Human said the government should lead the country’s gas response through the establishment of a Presidency-led national gas task team similar to the national energy crisis committee, which had successfully helped tackle loadshedding.
A national plan to help overcome the challenges in the next 12 months would go a long way to drive the potential for gas, according to the roadmap.
Human said there was a complete lack of political sponsorship and government alignment was critical. “The biggest challenge is establishing political sponsorship, which we don’t have for this particular gas plan.”
According to Human, gas from Namibia would be supplied to South Africa via a pipeline through Sasolburg, opening up cheap gas. He said Igua-SA was about to commence on a prefeasibility study to land gas in Sasolburg from Namibia at a cost of between $6 and $8 (about R102 and R136) per kilojoule as opposed to LNG economics, which is in the $11-$12 range.
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