TWO crucial issues stood out on the agenda of the Africa Energy Indaba held last month: how to implement the regional integration of African energy supplies and how to find people akin to Bill Gates or Richard Branson to lead the industry.
Gregory Nott, energy specialist and director at law firm Norton Rose Fulbright SA, says the government’s independent power producer office has indicated that liquified natural gas (LNG) will be used for power generation in SA.
"The Mozambique gas finds must register as huge opportunities for SA and the region.
"The discoveries rank among the world’s largest over the past 20 years and have the potential to push Mozambique into (becoming) a significant LNG exporter in the years to come," he said.
"If the renewable programme for which the Independent Producer Programme office was responsible is any benchmark, the LNG process will be another South African success," Nott said.
But there is a problem of "national ego", says Brian Statham, chairman of the South African National Energy Association.
"There are lots of interesting projects happening across the African continent, but often they are too big for national markets," he said. "I am seeing no indication that the (Mozambican) gas fields are going to deliver energy to the African continent."
Rather, it appeared the gas would be converted into LNG and exported to Southeast Asia.
Mr Statham said the Namibian gas industry had languished for about 30 years because neighbouring Angola was not interested in co-operating in a sub-Saharan project, and this was far too big a burden for the Namibian economy alone.
SA’s stalled Mineral and Petroleum Resources Development Act still requires whipping into shape, as potential energy investors find the legislation extremely unappealing in its current form.
"We have a fear in this country that our natural resources will be exploited and taken offshore," Statham said.
He said sub-Saharan African countries needed to sell much more energy among themselves, while enabling investment in this process.
There was also a worry in SA about the lack of policy regarding cleaner fuels, and how oil companies would recover the costs of upgrading their refineries.
Statham said oil and gas major Shell was still "fairly active" in SA, but domestic energy champion Sasol was playing a "waiting game" and was focusing on its US ethane cracker interests.
He said he could not imagine that Sasol would not want to be a player in SA’s energy markets, but that the existing gas distribution network was inadequate.
This affected prospects for Karoo shale gas exploration and put a focus on developing other options, such as LNG terminals at the Saldanha port near Cape Town and Coega harbour complex in the Eastern Cape.
However, PetroSA’s proposed 300,000 barrels-per-day Project Mthombo crude oil refinery for Coega had been in the pipeline for so long now that investors had become jaundiced.
Tagged at an estimated cost of R120bn, the project aims to ensure security of supply of transportation fuels for the country by reducing imports of petroleum products and producing cleaner fuels.
Christoph Frei, secretary-general of the World Energy Council, says unconventional gas supplies, led by the US shale gas revolution, have contributed to the structural shifts that are under way in global natural gas markets.
He said all conventional business models of energy supply were under pressure from carbon emissions to changing markets conditions — such as low oil prices and the effect this had on shale gas projects — as smart energy solutions and lower barriers to entry increasingly became the norm.
"Globally, there is massive pressure for innovation," Frei said. But he said project funding and money for training personnel was difficult to find in existing markets.
He said SA needed to solve its "policy challenges" with regard to drafting energy plans.
The World Energy Council’s "energy trilemma index", which ranks countries in terms of their "likely ability to provide sustainable energy policies", places SA 84th out of 130 nations.
SA is ranked last out of the index’s 130 countries in the environmental sustainability subsector of energy supply.
Frei said low commodity prices coupled with the need for green energy solutions had pushed countries including Japan and South Korea to options for gas-fired energy rather than coal.
But in rural Africa — where power supply was largely nonexistent — the obvious move was towards renewable energies such as wind and solar, he said.
Sasol ’s natural gas venture in Mozambique that was inaugurated in 2004. Picture: REUTERS
TWO crucial issues stood out on the agenda of the Africa Energy Indaba held last month: how to implement the regional integration of African energy supplies and how to find people akin to Bill Gates or Richard Branson to lead the industry.
Gregory Nott, energy specialist and director at law firm Norton Rose Fulbright SA, says the government’s independent power producer office has indicated that liquified natural gas (LNG) will be used for power generation in SA.
"The Mozambique gas finds must register as huge opportunities for SA and the region.
"The discoveries rank among the world’s largest over the past 20 years and have the potential to push Mozambique into (becoming) a significant LNG exporter in the years to come," he said.
"If the renewable programme for which the Independent Producer Programme office was responsible is any benchmark, the LNG process will be another South African success," Nott said.
But there is a problem of "national ego", says Brian Statham, chairman of the South African National Energy Association.
"There are lots of interesting projects happening across the African continent, but often they are too big for national markets," he said. "I am seeing no indication that the (Mozambican) gas fields are going to deliver energy to the African continent."
Rather, it appeared the gas would be converted into LNG and exported to Southeast Asia.
Mr Statham said the Namibian gas industry had languished for about 30 years because neighbouring Angola was not interested in co-operating in a sub-Saharan project, and this was far too big a burden for the Namibian economy alone.
SA’s stalled Mineral and Petroleum Resources Development Act still requires whipping into shape, as potential energy investors find the legislation extremely unappealing in its current form.
"We have a fear in this country that our natural resources will be exploited and taken offshore," Statham said.
He said sub-Saharan African countries needed to sell much more energy among themselves, while enabling investment in this process.
There was also a worry in SA about the lack of policy regarding cleaner fuels, and how oil companies would recover the costs of upgrading their refineries.
Statham said oil and gas major Shell was still "fairly active" in SA, but domestic energy champion Sasol was playing a "waiting game" and was focusing on its US ethane cracker interests.
He said he could not imagine that Sasol would not want to be a player in SA’s energy markets, but that the existing gas distribution network was inadequate.
This affected prospects for Karoo shale gas exploration and put a focus on developing other options, such as LNG terminals at the Saldanha port near Cape Town and Coega harbour complex in the Eastern Cape.
However, PetroSA’s proposed 300,000 barrels-per-day Project Mthombo crude oil refinery for Coega had been in the pipeline for so long now that investors had become jaundiced.
Tagged at an estimated cost of R120bn, the project aims to ensure security of supply of transportation fuels for the country by reducing imports of petroleum products and producing cleaner fuels.
Christoph Frei, secretary-general of the World Energy Council, says unconventional gas supplies, led by the US shale gas revolution, have contributed to the structural shifts that are under way in global natural gas markets.
He said all conventional business models of energy supply were under pressure from carbon emissions to changing markets conditions — such as low oil prices and the effect this had on shale gas projects — as smart energy solutions and lower barriers to entry increasingly became the norm.
"Globally, there is massive pressure for innovation," Frei said. But he said project funding and money for training personnel was difficult to find in existing markets.
He said SA needed to solve its "policy challenges" with regard to drafting energy plans.
The World Energy Council’s "energy trilemma index", which ranks countries in terms of their "likely ability to provide sustainable energy policies", places SA 84th out of 130 nations.
SA is ranked last out of the index’s 130 countries in the environmental sustainability subsector of energy supply.
Frei said low commodity prices coupled with the need for green energy solutions had pushed countries including Japan and South Korea to options for gas-fired energy rather than coal.
But in rural Africa — where power supply was largely nonexistent — the obvious move was towards renewable energies such as wind and solar, he said.
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