Hope for Zuma gas strategy

06 October 2015, News Wires – South Africa is aiming to stimulate the much-needed development of its gas infrastructure by building on the success of a programme that gave private sector players the opportunity to invest in renewable projects.


Mr. Jacob Zuma, South Africa President

The country has been beset by brown-outs and black-outs for years, with state-owned utility Eskom unable to meet rising demand for power largely due to a lack of funds.

By allowing open access to Eskom’s power grid, a recent move to attract private money to the nascent renewables business was such a success that President Jacob Zuma aims to deploy a similar strategy for the gas sector.

Initial details began to emerge at an event in Cape Town this week.

“South Africa ran this renewable energy programme where any investor could bid for projects on a price-per-kilowatt-hour basis and the 10 cheapest (won contracts),” said a source.

The government was said to be pleased with the outcome because it had so many bidders and the prices offered were low.

The first gas projects could focus on a liquefied natural gas import facilities at sites such as Mossel Bay, Richards Bay and Saldanha, particularly at a time of low LNG prices.

If these schemes are successful, they could kick-start the development of indigenous gas reserves, possibly including the Ibhubesi field off the west coast and coalbed methane resources.

Let’s hope for a positive outcome for the government’s gas strategy, because South Africa is much too reliant on dirty coal to meet its power needs.

  • Iain Esau, Upstream
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