Numbers for developing an SA gas network still don't add up, Energy Indaba hears

Currently, the economics of developing a gas network in South Africa will not "add up" from a commercial point of view and, therefore, there is not really any large appetite to do anything about it, according to Steve Clark, an energy expert and PhD student in mechanical engineering related to renewable energy at the University of Stellenbosch.

He believes the large Brulpadda offshore gas field, discovered early in 2019 about 275km from Mossel Bay, likely represents the best South Africa can offer in terms of gas opportunities. French giant Total, along with some partners, own the exploration rights.

Clark believes Brulpadda's future will be "interesting". But he is not optimistic that - if even the existing discoveries made in SA thus far have not led to the development of a gas network - there will be much further development further afield in Africa.

If there is little to speak of in terms of a domestic gas market, the question remains for Clark how to build Brulpadda into a successful operation, he said during a panel discussion at the Africa Energy Indaba on Wednesday.

"The amount of gas used as part of SA's energy mix - as envisaged in the latest Integrated Resource Plan (IRP) - is actually a very small amount on an annualised basis," said Clark. "I am interested to see what Total comes up with to make [Brulpadda] work. I think it will be an interesting challenge."

As for an option of looking at using gas obtained via a pipeline from Mozambique, for example, he said the issue is not so much the gas source, but how SA can get the amount of energy it needs when it needs it.

The challenge is, therefore, about the storing and "dispatchability" of the gas, he said, an aspect his research is looking at.

In his opinion liquefied natural gas (LNG) imported via the port of Maputo in Mozambique is one of the more "logical" options for SA.

At the same time, it boils down for him to the SA market not being big enough for this to happen.

Darryl Hunt, a consultant from Dynamic Energy, said during the panel discussion that, in his view, it is imperative to get an LNG programme off the ground in SA.

He agrees that it would have to involve "a commercial reality check". Instead of an actual pipeline being used, he thinks the focus might start moving to so-called "virtual pipeline" initiatives to compress or liquefy gas and move it along by road or rail.

"I don't see it happening as a pipeline. That is too challenging," he said.

Panel member Niall Kramer, an independent consultant and former CEO of the SA Oil and Gas Alliance, agrees that a gas pipeline is not feasible for SA.

He is of the view that a more integrated approach is needed in the country when it comes to gas. Although the amount of gas envisaged as part of the country's energy mix in the IRP is very low, he sees it as a baby step in the right direction.

He too thinks the initial gas to be used in SA would be LNG. He does not, however, foresee gas easily replacing the use of coal in the country, due to "socio-political interests" like labour unions favouring the coal industry, but he thinks gas would rather be used instead of diesel.

For him the use of gas in SA would be like a bridge, not necessarily to a low-carbon future, but to a better energy mix in the country.

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