Minister of Mineral and Petroleum Resources Gwede Mantashe says that the government is taking steps to avert South Africa’s looming “gas cliff”.
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Minister of Mineral and Petroleum Resources Gwede Mantashe says that the government is taking steps to avert South Africa’s looming “gas cliff”.
IOL previously reported that the Portfolio Committee on Electricity and Energy has emphasised the urgent need for coordinated action to address South Africa’s looming “gas cliff” and secure the country’s energy future.
This was after the committee was briefed by key industry players and government entities on the expected sharp decline in natural gas supplies from Mozambique’s Pande and Temane fields by 2028, which currently provide a significant portion of South Africa’s gas needs.
According to reports, this gas supply supports more than 13,000 direct jobs and reportedly contributes about 5% to the national GDP and its continued decline threatens around 70,000 jobs.
Responding to a parliamentary question posed by Umkhonto Wesizwe MP Moses Mbatha, who had asked what measures were being taken to address the impending shortfall, Mantashe said the government is pursuing a mix of short-term supply extensions, LNG imports and long-term local gas development.
"The Republic of South Africa and the Republic of Mozambique, through the Bi-National Commission (BNC) held in Maputo, agreed to engage on the extension of the ROMPCO pipeline beyond its current concession period. The two countries further agreed to pursue the development of Liquefied Natural Gas (LNG) terminal to ensure continued gas supply through the ROMPCO pipeline," Mantashe said.
He said that "in the short term, the Republic will continue to procure gas from Mozambique, with Sasol indicating continued gas supply until approximately 2030".
"The cost of gas will remain at current levels in the immediate term, with future pricing to be determined by NERSA. The Republic has existing gas infrastructure, which currently serves customers.
"Additional infrastructure, including LNG import and storage facilities, will be developed at various ports in South Africa.LNG storage infrastructure will be developed over time, likely anchored by gas-to-power projects. The required infrastructure will be funded through a combination of equity and debt, in line with international practice".
He added that "the Republic is pursuing the development of local gas resources in the long term".
"Yes, the Republic is pursuing the development of local gas resources in the long term. This includes the exploitation of onshore and offshore gas resources through continued support for upstream exploration and drilling activities. It is envisaged that these gas blocks will progress to production and contribute to the domestic economy".
mthobisi.nozulela@iol.co.za
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