Sasol, the synthetic fuels and chemicals producer, and the state-owned Central Energy Fund have joined forces to accelerate the development of SA’s gas resources.
Focus areas include future supply options, and enabling infrastructure critical to sustain and grow the gas market, according to a memorandum of understanding (MoU) signed by the companies. Both of them will explore developing multiple low-cost gas import locations around the country.
The memorandum comes two weeks before Sasol’s capital markets day, where it has promised to outline its decarbonisation plans. A credible strategy is critical for Sasol’s future as the group’s hefty carbon emissions are seen as the biggest risk to its investment case. While using more gas is seen as central to reducing the company’s carbon footprint, supply from two gas fields in southern Mozambique is being depleted.
The MoU brings together SA’s two “leading pioneers of the gas industry that possess deep experience in operating across the gas value chain, from exploration to downstream operations”, Sasol and the CEF said in a joint statement.
Sasol and the CEF have dedicated resources, overseen by a senior level steering committee, to collaborate in exploring options to develop and expand the Southern African natural gas market.
“Gas is instrumental in enabling a just energy transition in SA and requires immediate attention to introduce additional supply to SA,” said Priscillah Mabelane, Sasol’s executive vice-president for the energy business. “Currently, the country’s gas supply comes from the Pande and Temane gas fields in Mozambique, which will need to be supplemented in the long term, as these reserves begin to mature.”
Sasol said preliminary global benchmark case studies indicate that countries experiencing growth in demand for gas have opted for increasing the number of import locations to serve regional markets via pipeline. A successful example is India, which has six liquefied natural gas (LNG) terminals in operation, with another four under development that will be operational by 2023. This approach has significant potential for socioeconomic development around these import locations.
Ishmael Poolo, group CEO of the CEF said core to the group’s mandate is to ensure security of supply, domestic job creation and value addition.
“In this regard, gas remains a critical component in our country’s just energy transition journey, and our continued collaboration with Sasol in unlocking growth in the gas space remains critical for us in contributing to the achievement of an optimal energy mix.”
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