Another energy crisis is waiting for SA

Another energy crisis is waiting for South Africa in two years’ time when Sasol will stop supplying gas from the two gas fields it operates in Mozambique and start using the remaining gas itself. As with electricity, there have been warnings for some time that this was coming, but nothing is being done to avert a crisis with gas supply.

Busi Mavuso, CEO of Business Leadership SA, says in her weekly newsletter that through a combination of policy inaction and an inability to commit to the large-scale investment needed to create alternative infrastructure, we now face an almost inevitable supply interruption that puts 70 000 jobs at risk for people employed in businesses that rely on gas as a key input, generating R500 billion a year for the economy.

“There are possible solutions, but they will require swift action from government and business working in partnership. It takes massive investment to develop new sources of gas and infrastructure to get it to where it is needed and as it stands the best options still envisage a 12 to 18 month gap between the end of Sasol’s supply and any new supply coming on stream,” she says.

Mavuso points out that there are several potential sources, including major developments in Namibia and Mozambique, as well as the Brulpadda and Luiperd prospects off the Cape Coast, but nothing has been done about the investment in infrastructure needed for these sources of supply to be able to reach Gauteng and KwaZulu-Natal where most users are.

“Talks on developing Brulpadda and Luiperd have been stuck for some time over whether Petro SA will be an anchor consumer. PetroSA’s Mossgas refinery has been sitting idle for four years since its last gas supply source was exhausted.”

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She says for TotalEnergies to commit to the huge investment needed to bring those resources on stream, it needs to secure agreements with largescale buyers.

“Even if it does, it will take until 2030 for the project to start supplying gas.”

Mavuso says a massive coordination effort is needed.

“Potential users of gas, both public and private sector, from industry to electricity production, must form agreements with potential suppliers and logistics providers to allow the investment to happen.

“However, the role of government in creating an enabling environment for the necessary licensing, particularly the Petroleum Agency of South Africa and the department of mineral resources and energy, is the most important.”

She warns it will not be easy, as there are complex technical considerations regarding the sources of gas that are most feasible to tap as well as the ways it can be transported, but says by coordinating the right expertise, political will and focus on solutions, we can make progress.

“We must act now. Business, including potential suppliers and consumers of gas, is ready and willing to partner with government to work on solutions. Long-term secure supply is years away and we will need interim measures to fill the gap when the existing supply runs out. We cannot afford to waste another day.”