Maximizing the country’s gas reserves is essential to guaranteeing energy security, affordability, and reliability as South Africa’s energy crisis worsens as state utility Eskom increases the use of load shedding.
The optimization of the gas sector gives Africa’s second-largest economy the chance to draw the significant investments necessary to propel economic expansion through job creation, GDP growth, and industrialization in addition to stabilising the energy supply.
However, a number of obstacles, such as unjustified energy transition-related lawsuits against hydrocarbon development, inadequate exploration and production investments, weak technical solutions, underdeveloped gas infrastructure, delays in gas project rollout, and policy gaps, continue to prevent South Africa’s gas market from reaching its full potential and torment the nation’s energy sector.
South Africa is on the verge of a severe energy crisis as litigation keeps investors away and the nation halts significant oil and gas developments worth up to R1 billion in less than two months, according to energy regulator Petroleum Agency SA.
ExxonMobil, another significant participant, is also leaving the market, which makes it even more urgent to accelerate upstream production investments and activities.
“Natural gas, in our opinion, will play a role in the transition, yet we are told that all fossil fuels are bad. Africa must advance its oil and gas as a global energy leader.
When we commit to net zero, we do so knowing that energy can ensure industrialization and economic growth.
Making the most of Africa’s currently available and applicable resources is the way to go forward.
African Energy Week (AEW) opening ceremony speaker Gwede Mantashe of South Africa remarked, “The continent of Africa must create new technology and tactics to ensure it continues to grow its resources.
The African Energy Chamber (AEC), the voice of the continent’s energy industry, is adamant that gas is the best way for South Africa to solve its immediate and long-term energy issues.
The Chamber is urging the South African government and key players in the energy market to expedite the development of recent discoveries, such as TotalEnergies’ Brulpadda and Luiperd projects, in order to produce additional energy capacity for security and to advance exploration efforts and infrastructure development in the upstream, midstream, and downstream sectors.
According to NJ Ayuk, Executive Chairman of the AEC, “South Africa’s substantial gas resources present a potential to boost falling power output and there is a fundamental and urgent need for the government to relax regulation and create an enabling climate for oil and gas projects to take off.”
The Graff, Venus, Coral Floating Liquefied Natural Gas (LNG), Area 1 LNG Trains 1 & 2, and the Area 4 LNG Trains 1 & 2 are large gas projects that are being fast-forward for energy security in Mozambique and Namibia.
By easing regulation and replicating these best practices, South Africa has the chance to attract investments needed to address its energy problems by utilising domestic energy resources.
A step in the right direction is TotalEnergies’ proposed $3 billion investment to put up to 2.1 trillion cubic feet (tcf) of gas from the Luiperd and 1.3 tcf of gas from the Brulpadda projects on the market by 2027.
Ayuk continues, “The best way for South Africa to end load shedding in the long run is by optimising the development and exploitation of its 60 tcf of offshore gas reserves and approximately 200 tcf that are onshore starting with TotalEnergies’ Brulpadda and Luiperd discoveries, while also creating an enabling environment for businesses including major Shell to expand exploration activities.
Renewables, including solar and wind, remain expensive for ordinary people.
We think that adding more coal and gas to South Africa’s energy mix will make it more resilient.
In this regard, the AEC’s African Energy Week (AEW), Africa’s premier oil and gas event, will host the country’s energy market stakeholders, policymakers, as well as both regional and international energy companies and investors, to discuss the role of gas in stabilising South Africa’s energy production and supply from October 18 through October 21, 2022, in Cape Town.
In order to help South Africa and all of Africa combat high energy costs and persistent shortages brought on by geopolitical unrest, as well as to hasten industrialization, manufacturing, and employment growth, AEW 2022 will conduct panel discussions and high-level talks on the topic.