Jaco Human, CEO of the Industrial Gas Users Association South Africa (IGUA-SA), called on Wednesday (June 4), before the South African Parliamentary Electricity and Energy Committee, for the swift adoption of a fiscal guarantees framework to bring “to a transactional level” the Liquefied Natural Gas (LNG) import projects originating from Mozambique.
In a presentation highlighting recent shifts in the South African government’s vision regarding the role of gas in the energy matrix, Human emphasized that “industrial users need a roadmap with defined actions, timelines, and clear political commitments, without further rounds of consultations or statements of intent.” According to the IGUA-SA CEO, only this way will investors be attracted to build LNG infrastructure capable of meeting the growing energy demand in the short term.
According to the analysis presented, South Africa has a nine-month deadline to finalize the fiscal framework, develop a demand aggregation platform, and complete transactions that enable the investments necessary for building an LNG import terminal by mid-2030. In this context, Jaco Human highlighted that “only the terminal projects in Mozambique, connected to the Rompco pipeline from Maputo to Gauteng, could be operational within the required timeline.” The proposed terminal for Richards Bay, although progressing, “will not be ready in time and will primarily serve the KwaZulu-Natal industry, falling short of the hinterland’s needs.”
The official stressed that “at this moment, it is important to focus on short-term enablers, namely demand aggregation and the establishment of public-private partnerships for the guarantees model,” arguing that there are “several options and schemes available, but it is urgent for the involved parties to sit at the table and work at the operational level.” Furthermore, he called for the parallel development of policies defining the medium-term gas strategy to ensure the sustainability of future operations.
In the same session, Sasol confirmed that the plateau of supply from its Pande and Temane concessions in Mozambique has been extended until 2028 (instead of 2026) but admitted that “only LNG imported from Mozambique will constitute a realistic solution to meet industrial demand in the short and medium term.”
To address possible shortages until then, the company is also preparing to supply “coal-derived synthetic gas (MRG),” although at higher costs due to production prices and the diversion of raw materials from chemical processes.
Before the Minister of Mineral Resources and Energy, Gwede Mantashe, and other stakeholders such as Craig Morkel, president of the South African Oil and Gas Alliance, Jaco Human reinforced that “until we fully exploit our own resources, importing Mozambican LNG is the only immediate way.” Mantashe, while regretting the predominance of discussions on LNG, reiterated the importance of developing domestic projects, while Morkel acknowledged that “the ambitions exist, but the constraints are real.”
Source: Engineering News
