Mantashe allays fears about looming gas crisis in SA

Mineral Resources and Energy Minister Gwede Mantashe has allayed fears of a looming gas crisis in South Africa.

The country is facing a gas shortage from June 2026 after chemicals company Sasol announced that it will stop supplying natural gas from Mozambique.

Job losses

As with electricity, there have been warnings the grim situation was coming, but nothing is being done to avert a crisis.

Busi Mavuso, CEO of Business Leadership SA, said through a combination of policy inaction and an inability to commit to the large-scale investment needed to create alternative infrastructure, South Africa now faces 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.

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Mantashe says SA has a plan for gas supply

Mantashe said his department has taken note of concerns regarding the current and future gas supply in the South African market due to “commercial disputes between Sasol and its customers”.

“It is a known fact that natural gas, like other natural resources, is a finite resource and, therefore, Sasol reaching a cliff in its gas block in Mozambique is not an anomaly.

“Having noted this eventuality, we, together with the Department of Trade, Industry, and Competition (DTIC), have established a task team that includes private sector players to develop a joint strategy that will ensure a seamless transition and business continuity, thus ameliorating potential job losses,” Mantashe said.

He said the Department of Mineral Resources and Energy has also completed all the modelling and drafting work for the country’s Gas Master Plan, which it intends to present to Cabinet this month.

“To further mitigate the negative impacts of this eventuality, last year we entered into negotiations with the Mozambican government and crafted a memorandum of understanding (MOU) covering two aspects: partnering and trading on electrons from their Mphanda Nkuwa project and partnering and trading on gas molecules from their newly discovered gas fields and Matola LNG hub.”

MOU with Mozambique

Mantashe added the MOU with his Mozambican counterpart is ready to be singed and be put into action within this month.

He said as part of interventions through the Central Energy Fund (CEF), government had signed a sales agreement with Empresa Nacional de Hidrocarbonetos in Mozambique, with a potential to deliver up to 200 petajoules of natural gas.

“To breathe life into this agreement, PetroSA, another subsidiary of CEF, has applied for a gas trading licence with the National Energy Regulator of South Africa. We are convinced that the granting of this licence will ensure continuous supply.”

Mantashe said notwithstanding these challenges and the “persistent threats to the development of the South African Upstream Petroleum Industry by foreign-funded lobby groups”, South Africa has made significant new finds of natural gas including the discovery of gas by TotalEnergies in the Outeniqua Basin, and the discovery of maiden gas reserves by Kinetiko Energy in Amersfoort, Mpumalanga.

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