South Africa turns to Mozambique to avoid looming gas crisis

Stephen Grootes speaks to Jaco Human, executive officer of the Industrial Gas Users Association of Southern Africa (IGUA-SA), about South Africa’s looming gas shortage.

Listen to the interview in the audio player above.

South Africa and Mozambique are working together on new energy projects to prevent a serious gas shortage that could hit South African industries within the next few years.

South Africa is expected to start running short of natural gas from around 2028. This is because gas production from the Pande and Temane gas fields in Mozambique, owned by Sasol, is declining.

This gas is sent to South Africa through the Rompco pipeline and is vital for Sasol’s factories in Secunda and Sasolburg, as well as for steel and petrochemical industries.

To deal with this looming shortage, the two governments are discussing three major energy projects in Mozambique.

Mozambique has very large gas reserves, especially in the Rovuma Basin off the coast of Cabo Delgado, estimated at over 85 trillion cubic feet.

Speaking to Stephen Grootes on The Money Show, Jaco Human, executive officer of the Industrial Gas Users Association of Southern Africa (IGUA-SA) says by 2030, South Africa will run out of gas if a solution is not found.

"It may sound far in the future, but the issue of course is you've got to work backwards from that point in time to understand that significant infrastructure developments are required. We need build, operate and construct Liquified Gas terminals, and that takes time."

- Jaco Human, executive officer - IGUA-SA

"It really leaves us with an extremely narrow window to put a commercial construct together for the importation of gas. The government is particularly unclear at this point to industry in term of where they find themselves."

- Jaco Human, executive officer - IGUA-SA

"We simply don't know where the government stands in terms of it's action plan and what is required. There is an absolute need for collaboration between government and the private sector, and we have difficulty picking up that traction."

- Jaco Human, executive officer - IGUA-SA