Eskom and Sasol team up to address imminent gas shortfall

Collaboration aims to develop sustainable LNG import market amid growing energy demands.

In a step towards reshaping South Africa’s energy future, Eskom and Sasol have signed a Memorandum of Understanding (MoU) to explore the country’s liquified natural gas (LNG) needs and solutions for a potential gas supply shortage. The collaboration will focus on long-term gas supply security and developing a sustainable LNG import market while positioning gas as a vital resource for power generation and re-industrialisation.

The partnership aims to identify the necessary volumes of LNG required to support a viable import market and the infrastructure needed to sustain it. ADVERTISEMENT CONTINUE READING BELOW

This initiative will be supported by government-to-government relationships and aligns with South Africa’s energy transition goals by using gas for electricity generation, reducing the country’s reliance on coal, and aiding in decarbonisation efforts.

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Supported by Minister of Electricity and Energy Dr Kgosientsho Ramokgopa, the MoU was signed at a ceremony where he emphasised the critical role of LNG in addressing South Africa’s increasing energy demands.

“We have made it clear that we are serious about LNG solutions for the country and that our demand for gas across both industrial and energy frontiers will unlock these solutions,” said Ramokgopa.

“This collaboration between our two energy champions – one public, one private – will provide a data-driven and commercially sound basis for gas-fed industrialisation and for us to explore the well-worn path to lower carbon energy that the global north has already taken by scaling gas to power.”

In line with the Gas Master Plan, the MoU will explore sourcing LNG both domestically and from the broader Southern African Development Community (SADC) region, as well as other parts of Africa.

This will support Eskom’s plans to convert some of its coal-powered stations to gas. The agreement also aims to engage other state entities to build a comprehensive LNG value chain within South Africa.

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Sasol, under its revised gas strategy, said it is committed to ensuring a future supply of LNG for South Africa by partnering with Eskom and other stakeholders, including suppliers and infrastructure developers. By leveraging our combined technical, operational and project execution expertise, we are committed to enhancing regional energy security and driving development,” said Simon Baloyi, Sasol’s CEO and president.

“We have a great deal of experience as the two largest users of coal in South Africa,” said Dan Marokane, chief executive at Eskom, “and we felt by working together we could accelerate the climate change transition in a responsible way which sets the country up for the best economic, environmental and social outcomes and addresses the imminent gas supply shortfall. Eskom is focused on a balanced and diversified energy mix based on existing coal and nuclear and introducing gas for baseload power, as well as renewables and energy storage systems, including batteries and pumped hydro, to achieve overall security of supply and to meet and exceed rapidly expanding energy demand,” he concluded.

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