Page 7 - AfrElec Week 30

AfrElec COMMENTARY AfrElec
to pursue its strategies, the French company also set out plans to sell $5bn of assets in 2019-20, mostly in the exploration and production space.
South Africa
Transne , on July 23, announced a cost-sharing agreement with the International Finance Corp. (IFC) on a feasibility study for the development of an LNG regas terminal at the Port of Richards Bay, on South Africa’s east coast. e study will also consider overhauling Transnet’s pipelines – the Lily and Durban-Johannesburg pipelines – to carry natural gas to inland markets, in Kwa- Zulu-Natal, Mpumalanga, Free State and Gaut- eng. e IFC will provide $2mn for the study.
Unlike in Benin, this would be focused on industrial demand, the logistics company said, which would take advantage of its various trans- portation assets to “facilitate private investment in gas infrastructure for South Africa”. In addi- tion to the repurposing of existing pipelines, Transnet said it would also work on “virtual pipelines” for the transportation of LNG via rail or road.
The Richards Bay Natural Gas Network (NGN) project would also support future gas- red generation plants, in tandem with other LNG import plans at Ngqura and Saldanha Bay. Transnet, and other state-backed companies, would be involved, but it would require private investors to hold a majority stake in the Richards Bay plan.
e facilities should be operational by 2024, it said. An o cial at Transnet told Reuters that the company planned to hold a request for quotations in the second or third quarter of 2020. Transnet’s Jabulani Sithole went on to note concerns about Sasol’s pipeline supplies from Mozambique, which are expected to be constrained by 2023 as the Temane and Pande
elds run down.
South Africa has previously set out plans for
LNG imports into Richards Bay, linking this with a plan to build 2,000 MW of power gener- ating capacity in the area. At that point, in 2016, the project appears to have focused on the use of an FSRU.
e country is struggling as a result of spo- radic load-shedding. As South African President Cyril Ramaphosa acknowledged in his State of the Nation Address in June, the country’s eco- nomic performance has been lacklustre, owing to “load-shedding early this year, together with the continued uncertainty in the supply of elec- tricity and the state of Eskom ... Eskom is fac- ing serious nancial, operational and structural problems.”
Eskom, the troubled power utility, received a bailout at the beginning of the year and more funds are on their way, taking the total to around $6bn, in an effort to help it tackle its largely state-guaranteed $30bn debt pile. e le -lean- ing government is examining its options for the company but it seems increasingly likely that some form of privatisation must occur in order to try to right the ship.
South Africa is pursuing a number of options to secure additional supplies, including the development of its own resources such as the recently discovered Brulpadda. Plans for the import of LNG are also not new, but do demon- strate that high hopes for developing onshore shale gas plays have been largely frustrated.
Securing private investment for the LNG import plans at Richards Bay could be a powerful demonstration of how such plans can succeed, possibly paving the way for a broader privatisa- tion programme. In order to convince foreign investors that the plan is viable, though, the gov- ernment will need to make its case clear.™
Eskom, the troubled power utility, received a bailout at the beginning of the year and more funds are on their way.
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