Report Coverage
This report on the gas industry in South Africa includes information natural gases, LNG, LPG, helium, biogas and shale, demand and supply, production and consumption, exploration and discoveries, oil and gas reserves, prices, distribution, gas to power and the state of energy transition. There is information on notable companies, corporate actions and developments, and influencing factors such as environmental issues and technology and innovation. There are profiles of 13 companies including state-owned PetroSA, major players such as BP, Astron, Engen and Sasol, and small scale producer Renergen.
Introduction
• Recent low growth in gas consumption is due to limited gas supply, which is almost wholly supplied by Sasol, which expects supply to decline from 2028.
• Several recent large offshore gas discoveries in South African and Namibian waters could be positive for the development of the local and regional gas industry.
• Renergen, the country’s only natural gas producer, is still trying to raise finance to expand production at its onshore Virginia block in the Free State.
• In January 2023 it also began producing small amounts of helium, which could turn the country into a significant helium producer.
• Challenges from environmental activists are a key hurdle for the expansion of the industry.
Trends
• A number of green hydrogen projects are underway aimed mainly at exporting to Europe or to produce green ammonia and other derivatives.
• Gas has been adopted by governments around the world as transition energy as countries move away from fossil fuels.
• Gas prices, which peaked in mid-2022, have since declined, but are still slightly above pre-COVID-19 levels.
• Local natural gas prices are excessive, according to industrial gas users and those piping Sasol gas.
• Some automotive companies are converting vehicles to run on compressed natural gas, while LNG is also being adopted as an affordable clean fuel for long-haul trucks and vessels.
• The DMRE says gas can be used as a power source to produce energy, and is a cleaner option than coal.
Opportunities
• Developing green hydrogen projects.
• Development of LNG-fuelled vehicles and vessels.
• Helium deposits in the Free State could turn the province into a global node for the rare gas.
• Importing LPG and LNG.
• Namibian finds may boost South African oil and gas sector services.
• The availability of sizeable reserves of natural gas in neighbouring countries presents increased opportunities for regional collaboration, including pipeline development.
• The development of biogas, including the establishment of landfill-to-biogas plants.
• The discovery of gas resources in the southern Cape and the Karoo may attract investment to the sector.
• The increase of LPG and LNG imports through newly-constructed import terminals with sufficient storage facilities.
Challenges
• A lack of infrastructure for importing and transporting gas.
• A shortage of professionals with the requisite technical skills.
• Economic pressures could affect industrial consumption and the availability of exploration funding.
• Economies of scale to enable competitive pricing are required.
• Environmental challenges.
• Exploration and development costs are prohibitive and players are highly exposed to the volatility of commodity prices and exchange rates.
• Large upfront capital requirements for new gas projects or converting existing operations.
• Policy and regulatory uncertainty.
• Shale gas exploration companies face stiff opposition from affected land-owners and environmentalists.
• South Africa must depend mainly on imports of LPG as most of its refineries are not operating.
Outlook
• Oil and gas finds off the southern Cape coastline, Mozambique and Namibia, and shale gas in the Karoo, make the future of the country’s gas sector promising.
• However, challenges include a shortage of supply, a lack of enabling policy, unsustainable pricing for industrial customers and a shortage of infrastructure such as pipelines and import terminals.
• Gas demand could grow if gas-to-power projects come online.
• The Department of Minerals Resources and Energy said it is keen to exploit local gas reserves.
• Growing environmental challenges and slow moves by government to support the industry will likely make it more difficult for the country to take advantage of new finds.
The Gas Industry in South Africa
2024
Full Report
R 20 000.00(ZAR) estimated $1063.58 (USD)*
Industry Landscape
R 14 000.00(ZAR) estimated $ 744.50 (USD)*
Table of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1 | Industry Value Chain | 6 |
| 2.1 | Geographic Position | 7 |
| 2.2 | Size of the Industry | 11 |
| 3 | LOCAL | 16 |
| 3.1 | State of the Industry | 16 |
| 3.2 | Key Trends | 31 |
| 3.3 | Key Issues | 31 |
| 3.4 | Notable Players | 32 |
| 3.5 | Trade | 33 |
| 3.6 | Corporate Actions | 37 |
| 3.7 | Regulations | 39 |
| 3.8 | Enterprise Development and Social Development | 42 |
| 4. | AFRICA | 44 |
| 5. | INTERNATIONAL | 49 |
| 6. | INFLUENCING FACTORS | 53 |
| 6.1 | Economic Environment | 53 |
| 6.2 | Labour | 54 |
| 6.3 | Environmental Issues | 55 |
| 6.4 | Technology, R&D, Innovation | 58 |
| 6.5 | Government Support | 59 |
| 6.6 | Input Costs | 62 |
| 6.7 | Pricing | 62 |
| 6.8 | Carbon Tax | 63 |
| 6.9 | Gas Discoveries | 63 |
| 7. | COMPETITIVE ENVIRONMENT | 65 |
| 7.1. | Competition | 65 |
| 7.2. | Ownership Structure of the Industry | 67 |
| 7.3. | Barriers to Entry | 69 |
| 8. | INDUSTRY SUMMARY | 69 |
| 9. | OUTLOOK | 70 |
| 10. | INDUSTRY ASSOCIATIONS | 71 |
| 11. | REFERENCES | 71 |
| 11.1. | Publications | 71 |
| 11.2. | Websites | 72 |
| Appendix 1 - Summary of Notable Players | 74 | |
| Manufacturers of Gas | 74 | |
| Distributors of Gas via Pipelines | 75 | |
| Appendix 2 – Relevant Legislation | 77 | |
| COMPANY PROFILES – Manufacturers of Gas | 81 | |
| African Oxygen (Pty) Ltd | 81 | |
| Astron Energy (Pty) Ltd | 85 | |
| BP Southern Africa (Pty) Ltd | 87 | |
| Engen Petroleum Ltd | 89 | |
| National Petroleum Refiners of South Africa (Pty) Ltd | 92 | |
| Petroleum Oil and Gas Corporation of South Africa SOC Ltd (The) | 94 | |
| Renergen Ltd | 98 | |
| Shell and BP South African Petroleum Refineries (Pty) Ltd | 101 | |
| COMPANY PROFILES – Distributors of Gas via Pipelines | 104 | |
| Egoli Gas (Pty) Ltd | 104 | |
| Gigajoule International (Pty) Ltd | 106 | |
| Sasol Gas (Pty) Ltd | 109 | |
| SLG (Pty) Ltd | 111 | |
| Transnet SOC Ltd | 113 |
