Africa Energy Indaba

South Africa’s Energy Minister Trumpets Natural Gas as Energy Source

  • South Africa’ s Energy Minister, Hon Jeff Radebe has confirmed that natural gas will play a big role in South Africa’s energy plans going forward.
  • The plan includes a SADC masterplan to facilitate regional gas trade within SADC which includes LNG import terminals, storage and regasification facilities plus primary and secondary distribution pipeline networks.
  • Gas rich Zimbabwe, Botswana and Mozambique to play major roles.  
  • The Minster was speaking at the Africa Oil Week Conference held in Cape Town this morning

In a keynote address at the Africa Oil Week Conference held in Cape Town this week , South Africa’ s Energy Minister, Hon Jeff Radebe, said that he was “encouraged that many countries in our continent have set themselves the vision to enter the global gas market and promote the development of a domestic and regional gas market. Natural gas can improve the efficiencies of many industries currently using sub-optimal fuel sources in their production processes and resulting in a turnaround in the industrial capacity and demand in the region”.

SADC has recently initiated the development of a masterplan to facilitate regional gas trade within SADC. At the last SADC Summit in Namibia the establishment of the Inter-State natural Gas Committee was endorsed by the Heads of State. The SADC Ministers also signed a Statement of Intent for cooperation on the development of Regional Gas Market and Infrastructure.

Minister Radebe commented that “this collaboration will require support of financial institutions of the region, continent and beyond. We look forward to the support from all our potential partners as we pursue this initiative and we remain ready to engage”

He added “in South Africa we recently published for comment by the public an updated Integrated Resource Plan (IRP) which envisages a Gas to Power Programme incorporating Liquefied Natural Gas (LNG) imports as well as imports through pipelines. The period for comments has since closed and we will consider all comments and submit the final document to Cabinet in the next few weeks for approval”.

“This will be the main vehicle through which to stimulate this envisioned gas market in South Africa. Gas importation will require an all-inclusive effort by government and other stakeholders both in this country and with our partners. This is one area that can accelerate collaboration between producers of the molecules of gas and consumer countries. The proven gas reserves in the African continent alone are enough to more than cater for the continent’s energy needs”.

Radebe announced that he has put in place an enabling framework in South Africa for private sector participation in the energy sector to enable gas industry development and growth. The South African  Government is planning to attract investment in LNG import terminals, storage and regasification facilities, primary high-pressure gas transmission pipelines and secondary distribution pipeline networks.

Radebe also stated that “government was at the final stages of consultation on the amendments to the Gas Act of 2001 to better enable greater utilisation of gas in the economy”. He added “We already have the benefit of an experienced Energy Regulator for the gas market which ensures a level playing field for investors as well as protecting the interest of the consumer”.

In pursuance of improving energy supply security and trade within the Southern Africa Development Community (SADC), South Africa entered into a Gas Trade Agreement with the Republic of Mozambique in 2004. Radebe maintains that “this cooperation has worked very well for both countries in the monetisation of the gas resource whilst enabling industrial development. We are convinced that recent gas discoveries in the Rovuma basin in Mozambique will benefit the economies of this region and further bolster regional economic integration. The prospects for Coal Bed Methane in this country as well as Zimbabwe and Botswana are an indication of the need for closer collaboration”.

The Minster emphasized that development approach must be balanced, “citizens of our continent continue to lament the use of their resources without the concomitant development changes in their daily struggles. This justifiable concern has got to be addressed”.

Author: Bryan Groenendaal

Source: South African Ministry of Energy

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