SA’s industrial gas users have warned that without decisive government co-ordination and financial support, the country risks a severe gas supply crisis that could cripple its industrial base and derail economic recovery efforts.
Speaking at the release of the ambitious Gas Roadmap 2025-42 of the Industrial Gas Users Association Southern Africa (Igua-SA) on Wednesday, CEO Jaco Human highlighted glaring gaps in government co-ordination and fiscal frameworks.
“Current industrial demand alone is not enough to justify the investments required to maintain gas supply. We need to stack demand through government interventions and power projects.
“This is one of the biggest short-term challenges, alongside the absence of a fiscal framework for gas infrastructure investment,” Human said.
He added that, unlike the electricity sector, gas infrastructure investors had no government-backed mechanisms to share financial risk. “Fragmented decision-making and policy delays are slowing critical investment decisions,” he said.
The roadmap outlines a two-phase approach. In the short term (2025-30), SA must secure liquefied natural gas (LNG) imports via Mozambique and Richards Bay to bridge the gap once Sasol’s pipeline gas ends in June 2028.
Read: Sasol extends gas supply lifeline to 2030
Sasol plans to supply alternative synthetic gas for only two years. In the medium to long term (2030-42), the roadmap calls for domestic and regional projects — including West Coast Gas, Coega LNG and the Luiperd–Brulpadda fields — to provide reliable, lower-cost supply and reduce import dependence.
Gas-dependent industries contribute about 8% of SA’s GDP, roughly R700bn annually, and support more than 75,000 direct jobs. National gas demand is projected to rise from about 200 petajoules (PJ) to nearly 1,000 PJ by 2042, driven by manufacturing, mining, petrochemicals, and gas-to-power projects.
Human expressed concern over what he called a “lack of political sponsorship and alignment”, warning that fragmented decision-making and policy inertia were delaying essential gas investment decisions. “While industry has advanced several initiatives, we urgently need government co-ordination on demand aggregation and fiscal frameworks. Without this alignment, the risk of inaction grows,” he said.
“At present, there is no practical plan to replace our gas supply. The integrated resource plan [2025] recognises gas as vital, but the gas master plan remains incomplete. Policy recognises the importance of gas, but there is no evident supply-side solution, and we are running out of time,” Human added.
At present, there is no practical plan to replace our gas supply.
— Jaco Human, Igua-SA’s CEO
Developing domestic and regional gas resources, he said, could lower energy costs and support 3%-4% annual economic growth. LNG imports, while necessary in the short term, remained expensive compared with future West Coast Gas.
“Without firm government commitments to anchor demand, project investment will remain out of reach,” Human said.
He called for a national gas project team under the presidency, supported by a dedicated programme management office to co-ordinate planning across government departments and state-owned entities, including Eskom, Transnet, Rompco, Nersa, the Central Energy Fund and the department of energy.
Aggregating gas demand from industrial users and power producers was critical to make LNG terminals and pipelines financially viable.
“Immediate government leadership, a co-ordinated programme management office, and fiscal frameworks are essential,” Human said. “Industry is ready to collaborate, but the window to secure SA’s gas supply is closing rapidly.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.