Local gas projects support gas economy

South Africa’s significant natural gas reserves and extensive gas infrastructure exemplify the country’s potential to develop a natural gas industry, says research and strategy firm Birguid senior associate Patience Panashe.

She says this potential is made visible in various local gas projects, such as State-owned oil and gas company PetroSA’s offshore producing gasfield located in the Bredasdorp basin, in the Western Cape.

As a primary producer of indigenous natural gas in South Africa, PetroSA’s gasfield is used as feedstock for its gas-to-liquids refinery in Mossel Bay, also in the Western Cape.

“As this field is depleting, the planned liquefied natural gas (LNG) hub at the Coega Special Economic Zone, in Gqeberha, could act as a base for the import of additional feedstock,” says Panashe.

Moreover, the Cabinet has announced the planned merger between PetroSA, the Strategic Fuel Fund and gas development company iGas. The merger will help drive efficiency among the subsidiaries of the Central Energy Fund – the government’s energy sector holding company.

Another notable project is helium and natural gas producer Renergen’s Virginia gas project, in the Free State.

Panashe says Renergen is the only other local natural gas producer, using onshore wells at its Virginia gas project which is also, reportedly, the site of the world’s richest helium deposits.

The natural gas producer is the first company in South Africa to build a small-scale onshore LNG plant, with the company planning to monetise its LNG by developing about 12 to 18 LNG filling stations across South Africa by 2023.

Renergen has signed a deal with fuels company TotalEnergies, under which the French major will rebrand two of its filling stations on the N3 national route between Johannesburg, in Gauteng, and Durban, in KwaZulu-Natal, as LNG outlets.

“Companies, such as Renergen, participating in the LNG value chain will result in the development of LNG solutions that are environment-friendly and tailored for African needs. The customer base for LNG will be operating trucks for logistics companies, considering LNG displaces diesel use,” says Panashe.

She notes that exploration for natural gas is underway, with offshore exploration by TotalEnergies over block 11b/12b having resulted in the Brulpadda gas condensate discovery in 2019.

“This discovery is the first of its kind made in extreme deepwater conditions offshore South Africa and has the potential to change South Africa’s energy plans,” she concludes.