Minister of Mineral and Petroleum Resources Gwede Mantashe says that the government is taking steps to avert South Africa’s looming “gas cliff”.
Image: File
South Africa is facing a growing threat to jobs and industry as a looming “gas cliff” raises the risk of widespread disruptions to energy supply.
This comes as gas supplies from Mozambique’s Pande and Temane fields, which are transported to South Africa through the ROMPCO pipeline, are expected to decline as the fields near the end of their productive life.
The drop in supply is likely to affect factories and industries in provinces such as Gauteng, Mpumalanga and KwaZulu-Natal that rely on gas for production.
According to reports, the sector supports about 13,000 direct jobs, while up to 70,000 jobs could be at risk across the wider economy if gas shortages force production cuts or shutdowns in key industries.
IOL previously reported that the Portfolio Committee on Electricity and Energy has emphasised the urgent need for coordinated action to address South Africa’s looming “gas cliff” and secure the country’s energy future.
"The looming supply shortage poses serious risks to the country’s energy security, industrial output, and broader economic competitiveness," Committee Chairperson Nonkosi Mvana said.
"The committee heard from the stakeholders, among other things, the need to accelerate development of domestic and regional gas resources to supplement declining Mozambican supply, challenges with the regulatory environment and policy uncertainty hampering investment in gas infrastructure, and the importance of aligning gas-to-power projects with LNG import plans to create an integrated gas supply solution."
Electricity and Energy Minister Kgosientsho Ramokgopa has also previously warned that the country is heading towards a “gas cliff,” and failure to act could trigger serious economic consequences.
“The gas cliff is not a distant event. It is imminent. But it is not inevitable. We have the analytical tools, institutional memory and public-private platforms to act," Ramokgopa said.
Mineral and Petroleum Resources Minister Gwede Mantashe says the government is pursuing a mix of short-term and long-term measures to secure supply.
"The Republic of South Africa and the Republic of Mozambique, through the Bi-National Commission (BNC) held in Maputo, agreed to engage on the extension of the ROMPCO pipeline beyond its current concession period.
"The two countries further agreed to pursue the development of a Liquefied Natural Gas (LNG) terminal to ensure continued gas supply through the ROMPCO pipeline," Mantashe said.
He said that "in the short term, the Republic will continue to procure gas from Mozambique, with Sasol indicating continued gas supply until approximately 2030."
"The cost of gas will remain at current levels in the immediate term, with future pricing to be determined by NERSA. The Republic has existing gas infrastructure, which currently serves customers.
"Additional infrastructure, including LNG import and storage facilities, will be developed at various ports in South Africa. LNG storage infrastructure will be developed over time, likely anchored by gas-to-power projects. The required infrastructure will be funded through a combination of equity and debt, in line with international practice."
He added that "the Republic is pursuing the development of local gas resources in the long term."
"Yes, the Republic is pursuing the development of local gas resources in the long term. This includes the exploitation of onshore and offshore gas resources through continued support for upstream exploration and drilling activities.
"It is envisaged that these gas blocks will progress to production and contribute to the domestic economy."
Meanwhile, the Industrial Gas Users Association stressed the urgency of the situation last year, saying there is only a six to nine-month window to take necessary actions to avoid the "gas cliff".
mthobisi.nozulela@iol.co.za
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