The Gas Industry
The South African Gas Industry, Including Distribution by Pipeline
With domestic consumption of 4.5 billion cubic metres (bcm) in 2017, natural gas currently constitutes little more than 3.2% of the nation’s primary energy supply. Recent statistics show that the consumption of natural gas in South Africa contracted by 2.3% year-on-year in 2017. Although the Department of Energy has identified the harnessing of conventional and unconventional forms of gas as a strategic imperative, stakeholders report that South Africa’s uptake of gas continues to be constrained by the country’s relatively underdeveloped gas transmission and storage infrastructure. However, gas forms an important part of the country’s future energy mix. In terms of the new Integrated Resources Plan, the installed capacity of natural gas is expected to increase to 11,930 megawatts (MW), or 16% of total installed capacity, by 2030.
Industry Developments
With the depletion of South Africa’s offshore F-A field and South Coast Complex fields, which supplied indigenous natural gas to PetroSA’s Gas-to-Liquid (GTL) plant in Mossel Bay, the country remains largely reliant on imported natural gas from Mozambique. Ibhubesi, off the coast of the Northern Cape, is South Africa’s largest proven natural gas field with an estimated 540 billion cubic feet (bcf) of recoverable reserves, and is expected to start producing gas commercially by 2020. South Africa’s only proven onshore natural gas and helium reserves are in Virginia in the Free State. Recent research suggests that recoverable shale gas resources in the Karoo Basin are in the 13 trillion cubic feet (tcf) to 49 tcf range, substantially lower than previous estimates. After years of delay, 27 renewable energy agreements have been signed with independent power producers.
Report Coverage
The comprehensive report on the South African gas industry examines current conditions, developments and corporate actions as well as factors that influence the success of companies involved in the sector. Comprehensive profiles of 13 institutions include the state-owned PetroSA, which reported a net loss of R1.4bn in 2016/17 and Spring Lights Gas, South Africa’s largest non-integrated piped gas trader. It provides comprehensive information on gas companies including Sasol, which announced it would dispose non-core assets to focus on speciality chemicals, upstream exploration and production and liquid fuel retail and Engen, which entered into a R3.5bn share-swop deal with Vivo Energy. The report deals with important issues affecting the industry including the Integrated Resources Plan, the introduction of carbon tax and the establishment of gas-to-power landfill plants.
Table of Contents
| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Industry Value Chain | 4 |
| 2.2. | Geographic Position | 6 |
| 3. | SIZE OF THE INDUSTRY | 9 |
| 4. | STATE OF THE INDUSTRY | 12 |
| 4.1. | Local | 12 |
| 4.1.1. | Corporate Actions | 14 |
| 4.1.2. | Regulations and Government Policies | 15 |
| 4.1.3. | Enterprise Development and Social Economic Development | 20 |
| 4.2. | Continental | 22 |
| 4.3. | International | 25 |
| 5. | INFLUENCING FACTORS | 28 |
| 5.1. | Economic Environment | 28 |
| 5.2. | Government Initiatives | 28 |
| 5.3. | Input Costs | 29 |
| 5.4. | Technology, Research and Development (R&D) and Innovation | 30 |
| 5.5. | Labour | 31 |
| 5.6. | Cyclicality | 33 |
| 5.7. | Environmental Concerns | 34 |
| 6. | COMPETITION | 35 |
| 6.1. | Barriers to Entry | 37 |
| 7. | SWOT ANALYSIS | 37 |
| 8. | OUTLOOK | 38 |
| 9. | INDUSTRY ASSOCIATIONS | 39 |
| 10. | REFERENCES | 39 |
| 10.1. | Publications | 39 |
| 10.2. | Websites | 41 |
| APPENDIX 1 - SUMMARY OF MAJOR PLAYERS | 43 | |
| Manufacturers of Gas | 43 | |
| Distributors of Gases via Pipelines | 44 | |
| APPENDIX 2 | 46 | |
| Global Primary Energy Consumption | 46 | |
| APPENDIX 3 | 47 | |
| Total Proved Natural Gas Reserves | 47 | |
| COMPANY PROFILES - MANUFACTURERS OF GAS | 48 | |
| AFRICAN OXYGEN LTD | 48 | |
| BP SOUTHERN AFRICA (PTY) LTD | 55 | |
| CHEVRON SOUTH AFRICA (PTY) LTD | 57 | |
| ENGEN PETROLEUM LTD | 60 | |
| NATIONAL PETROLEUM REFINERS OF SOUTH AFRICA (PTY) LTD | 64 | |
| PETROLEUM OIL AND GAS CORPORATION OF SOUTH AFRICA SOC LTD (THE) | 66 | |
| RENERGEN LTD | 69 | |
| SHELL AND BP SOUTH AFRICAN PETROLEUM REFINERIES (PTY) LTD | 72 | |
| COMPANY PROFILES - DISTRIBUTORS OF GASES VIA PIPELINES | 75 | |
| EGOLI GAS (PTY) LTD | 75 | |
| GIGAJOULE INTERNATIONAL (PTY) LTD | 77 | |
| SASOL GAS (PTY) LTD | 79 | |
| SLG (PTY) LTD | 81 | |
| TRANSNET SOC LTD | 83 |
