South Africa inches towards LNG imports [Gas in Transition]

South Africa inches towards LNG imports [Gas in Transition]

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Natural Gas News
South Africa inches towards LNG imports [Gas in Transition]

Summary

South Africa is finally on the brink of developing its first LNG import terminals, just as it closes in on a substantial increase in domestic gas production. A combination of imported and domestic gas could address the country’s chronic power shortages and still heavy dependence on coal. [Gas in Transition, Volume 3, Issue 12] by: Neil Ford

South Africa has long planned to shift its energy mix from coal to greater use of gas and renewable energy, but progress has been very slow. Coal still accounts for 85% of installed generating capacity, producing nearly 200 TWh of power out of a total of 235 TWh in 2022 (see figure 1). Wind capacity stood at 3.1 GW and solar at 6.3 GW at the end of last year. State utility Eskom continues to dominate the power sector, despite deregulation. This, and a stagnating economy, have deterred investment by independent power producers. Eskom’s large debts and the economy’s fragility have limited Eskom’s own capacity to invest. As a result, new generating capacity has been badly needed for two decades and periodic power rationing has become steadily more common (see figure 2). Various strategies to address the shortages have come unstuck. For example, Eskom banked on the completion of two huge 4.8-GW coal fired plants, Medupi and Kusile. Both were badly delayed and subject to big cost overru...