Gas extraction

The country currently consumes around 180bn standard cu feet (scf) of gas per year and remains heavily reliant on imports to satisfy demand

Seeking to reduce its dependence on coal-fired power, South Africa is shifting its energy mix toward natural gas and renewables.

The country currently consumes around 180bn standard cu feet (scf) of gas per year and remains heavily reliant on imports to satisfy demand.

Roughly two-thirds of total consumption is imported from neighbouring Mozambique.

With the authorities announcing plans to add 3.1 GW of gas-fired generation capacity by 2025, compared to a total of 1.35 GW at present, identifying new domestic gas reserves and boosting imports both rank high on the agenda.

Commercialising conventional reserves

Efforts to commercialise the Ibhubesi gas field, located 105 km off the coast of North Cape Province, have taken another step forward, with Australia’s Sunbird Energy – which holds a 76% stake in the joint venture alongside national oil company PetroSA’s 24% – signing an agreement with public electricity utility Eskom last year.

Ibhubesi ranks as the largest proven gas field in the country, with 540bn scf of deposits and an additional 7.8trn scf believed to lie in the surrounding Orange Basin.

Under the deal, Eskom’s Ankerlig power stations, 40 km north of Cape Town, will take delivery of 30bn scf of gas per day for up to 15 years beginning in 2018, when production at Ibhubesi is expected to come on-line.

Exploration efforts are also progressing in nearby Saldanha Bay, where 14 oil and gas exploration licences have been issued for blocks off the coast.

Discovery and drilling in the area could help fuel ongoing development of the nearby industrial development zone (IDZ) specialising in oil and gas services and marine repair.

According to Willem Roux, Saldanha Bay port manager, the IDZ, which is scheduled to see R9.2bn ($602.5m) worth of investment over the next five years, is ideally positioned to serve oil rigs operating off the west and east coasts of Africa; around 120 oil rigs pass by the South Africa coastline each year, he told local media in 2015.

While much of the hub’s capacity will be geared toward supporting offshore production, work is also beginning on a liquefied petroleum gas import terminal in the bay, due to come online by June 2017.