In a quest to ensure energy security, accessibility and sustainability, SA is pursuing a diversified energy mix approach, which aims to reduce reliance on a single or a few primary energy sources.
Natural gas forms part of this mix. Accepted globally as a greener form of energy, natural gas serves not only as a source of dispatchable energy but also offers reliable, inexpensive and low-carbon power to meet our country’s growing energy needs.
With scientific research confirming the nexus between natural gas and economic growth and development, many economies around the world continue to steadfastly explore and develop gas as an energy source to ensure reliable power. It is undoubtedly one of the key accelerators of growth, whose production and exportation contributes to balance of payment and trade surplus as the value of exported goods increases.
Globally, the natural gas industry has moved into a supply surplus, favouring a larger role for this resource as a relatively clean fossil fuel in many countries’ energy policies. It is also in our interest as a developing economy seeking to intensify industrialisation efforts, that we develop and grow our natural gas sector.
There is growing consensus supported by technical studies that as SA moves from high to low-carbon emitting sources of energy, particularly in the electricity sector, gas must be among the options necessary to support the network and ensure security of supply.
Though the country’s unconventional gas potential is yet to be quantified, initial estimates point towards a prospect of possible domestic production, in significant volumes, in the long term.
As such, the department of mineral resources & energy has prepared and published a draft gas master plan that aims to provide a sound policy framework that will unleash the full potential of natural gas as a commodity.
Out for public comment, the draft plan recognises energy security as a fundamental ingredient to a stable and growing economy, and outlines the role of natural gas within the context of the energy mix. On final approval it will provide policy direction to the industry, and a long-term gas energy infrastructure outlay across the gas supply value chain.
Notwithstanding that its scope is limited to upstream production and associated activities (excluding exploration) and midstream transmission networks (excluding reticulation), the plan seeks among others to secure a supply of natural gas from both local and international markets.
It will ensure that the country’s natural gas demand and supply balance is well managed, while minimising the total energy cost to the economy. This careful balancing will in turn facilitate an efficient, competitive and responsive energy infrastructure network.
As with any other government policy it goes without saying that job creation is a prominent feature of the gas master plan. The much-needed jobs will be created through the development of local gas infrastructure, to the extent this is practical.
A recent survey by the Industrial Gas Users Association of Southern Africa revealed that the SA natural gas industry employs at least 118,535 people and contributes about R690bn a year to the country’s GDP, based on the existing gas supply, transportation and consumption. While this is commendable, more can and must be done.
In the Southern Africa region gas potential has been revealed by major discoveries that when developed will widen options for greater regional energy trade. Our gas economy is supported by supply from the Pande/Temane fields in Mozambique (majority-owned by Sasol) and methane-rich gas production, a by-product of Sasol’s internal processes. About 163 petajoules per annum (PJ/a) is imported from Mozambique, while about 30 PJ/a of methane-rich gas is produced at Secunda.
This industry was developed by deliberate government actions, starting with the 1998 white paper on energy policy document, the 2001 Gas Act, the 2001 inter-governmental agreement between SA and Mozambique, the 2001 regulatory agreement between the SA government and Sasol, and the development of gas transmission and distribution networks.
A joint venture between the SA government (represented by the SA Gas Development Company), the government of Mozambique (represented by Companhia Moçambicana de Gasoduto) and Sasol, was formed to own and operate the transmission and distribution pipeline network from Mozambique’s Pande and Temane gas fields to markets in both Mozambique and SA, for the economic benefit of the region.
Overall, the development of the gas master plan adds to existing energy policies as we craft a road map towards an integrated energy planning approach. The department has developed a model that depicts the likely growth of the gas sector, based on projected gas demand as the country transitions from high to low-carbon emitting technologies, while sustaining energy security to satisfy the energy profile of our industrialising economy.
Based on the analysis of the modelling results and comments from industry expects, stakeholders and the public, strategic paths will be adopted as policy choices to develop the country’s gas economy. Natural gas can play a significant role alongside the rise of renewable energy, improvements in energy efficiency and a more balanced, cleaner energy mix in reducing power sector emissions. This is in addition to meeting the increasing demand for natural gas from non-power industries.
SA stands ready to develop the natural gas economy not as a transitional fuel, as some organisations would argue, but as a sustainable fuel that supports our energy security as a sovereign state. Members of the public, industry experts and stakeholders have until Saturday June 15 to submit comments on the draft gas master plan.
• Audat is an energy policy specialist at the department of mineral resources & energy.
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