Petroleum Africa
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Thursday, May 25, 2017
For the short-to-medium term natural gas will play a key role in achieving South Africa’s clean energy goals, according to the country’s energy minister, Mmamoloko Kubayi. Speaking at a Gas-to-Power conference in Cape Town last week, Kubayi told attendees that that the government intended to proceed in line with the existing “vision and policy objectives” for gas infrastructure.
The Minister’s support for the gas program in its current form suggests that a procurement process should still arise in line with a LNG IPPPP project memorandum published in May 2016.
The memorandum states that the country will initially build gas infrastructure including at Richards Bay, for the importation of LNG. Kubayi says the LNG is for the short term, between 3-5 years.
For the medium term the development of pipeline infrastructure from is key. The minister said that this option was more in line with the country’s regional development objectives and the possibility of it being a more attractive option than LNG. In the long term the country is betting on shale gas from its Karoo Basin.
The process to amend the Gas Act of 2004 has commenced, to the stage that this year a draft Gas Amendment Bill will be tabled in cabinet, the Minister said. The amendments largely relate to a licensing framework for regasification infrastructure and mandating the Minister of Energy to make determinations regarding the required infrastructure, she added.
“In line with our regional integration strategy, we will negotiate with Mozambique regarding an energy collaboration agreement for the building of a pipeline from the Rovuma Basin into South Africa, among other things,” Kubayi explained.
“This will not only enable us to have access to natural gas from a neighbor, but it will also improve the possibility of a relatively attractive gas pricing formula relative to sourcing gas from the international market,” she added.
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