Introduction

Current development of regional gas-fields will lead to natural gas becoming a more important fuel in South Africa. With the availability of natural gas in neighbouring countries, such as Mozambique and Namibia, and the discovery of offshore gas reserves in South Africa, the gas industry in South Africa is undergoing rapid expansion.

In addition to coal gas and Liquid Petroleum Gas (LPG), South Africa produced about 930 000 tonnes of natural gas and 104 860 tonnes of associated condensate in 2003.

The entire gas and condensate output is dedicated to PetroSA's liquid-fuel synthesis plant, and accounts for about 1,5 percent of total primary energy supply. Gas manufactured from coal accounted for 5 percent of net energy consumption, while LPG accounted for about 6 percent.

Natural and coal gas play separate roles in the energy system, with natural gas being used solely as a feedstock for the production of synthetic fuels, and coal gas as an industrial and domestic fuel.

Gas infrastructure

South Africa's gas infrastructure stretches from Sasolburg in the northern Free State, through the industrial areas of Vereeniging, Johannesburg and the East Rand, and from Secunda to Witbank, Middelburg, Newcastle, Richards Bay and Durban.

Through the Sasol Gas Division, Sasol Oil markets industrial pipeline gas produced by Sasol Synthetic Fuels and Sasol Chemical Industries to about 700 industrial customers. These customers are mostly situated in the greater Johannesburg-Pretoria region and the industrial areas of Witbank-Middelburg and Durban. Its pipeline network consists of about 1 500 km of underground pipelines.

Most of the remaining 10 percent of gas sales in South Africa is on selling of Sasol gas by Metro Gas in Johannesburg, which owns 1 300 km of distribution pipe, and supplies 12 000 domestic and 3 000 industrial customers.

The privatisation of Metro Gas was completed in 2000. It is now owned by Egoli Gas, a joint venture company owned by Cinergy Global Power Inc.

Petronet owns and operates a gas pipeline, known as the Lily Line. It is about 600km long and transports methane-rich gas from Sasol's Secunda plant as far as the Durban area. Easigas (Shell) has a small LPG/air pipe network in Port Elizabeth. A privately owned company in Port Elizabeth distributes a small amount of Liquid Petroleum Gas (LPG) / air blend by pipe.

Industrial customers use 87 percent of the gas, and domestic consumers the rest. The supply of cost-competitive pipeline gas is complemented by the fuel oils range of low-sulphur residual and distillate fuel oils derived from coal and other synthesised forms, as well as crude oil.

A gas infrastructure plan [PDF, 1.79MB] was developed to indicate a strategy for the development of the natural gas industry in South Africa. The government wishes to promote the gas industry based on its energy policy objectives as set out in the White Paper on Energy Policy [PDF, 592KB]. These include:

• Increasing access to affordable energy services;
• Improving energy governance;
• Stimulating economic activity;
• Managing energy-related environmental impacts;
• Securing security of supply through diversity of supply;
• Competition within and between energy carriers; and
• Promoting New Partnership for African Development (NEPAD) cross-border type projects.

This plan attempts to take this policy one step further into a practical set of options that focus on a gas transmission network.

Gas governance

The introduction of natural gas into South Africa's mainstream energy supply is an important step in the fulfilment of one of the major objectives of the White Paper on Energy Policy.

The Department of Minerals and Energy has formulated:

• The Gas Act 2001, Act 48 of 2001 [PDF, 1.34MB] and the Government / Sasol regulatory agreement referred to in section 36 of the Act [PDF, 1.82MB], which aims to:
  • Promote the orderly development of the piped gas industry;
  • Establish a national regulatory framework; and
  • Establish a National Gas Regulator as the custodian and enforcer of the national regulatory framework.
• The Gas Regulator Levies Act 2002, Act 75 of 2002 [PDF, 239KB], which provides for the imposition of levies for the functioning of the national gas regulator and for matters connected therewith.
• Piped Gas Regulations. After the establishment of the National Energy Regulator, the Department of Minerals and Energy has promulgated the Piped Gas Regulations, 2007, to promote the orderly development of the piped gas industry.

             Due to the size of the document it has been divided into two parts. 

             Click  here to view part 1 of the Piped Gas Regulations, 2007.
             Cliick here to view part 2 of the Piped Gas Regulations, 2007.

Cofoza lapha ukubona Imitheshwane yenqubo yeGesi (Piped Gas) ehamba ngamapayiphi, 2007.

International agreements

South Africa - Mozambique
To facilitate the trade in natural gas between Mozambique and South Africa, a gas trade agreement has been put in place and a binational Gas Pipeline Commission established. The commission has the task of facilitating the movement of gas between the two countries.

In Mozambique, the natural gas resources in the Pande and Temane areas are to be exploited via a gas pipeline from Mozambique to South Africa. The pipeline will supply the South African market with 120-million gigajoules a year and will raise natural gas's contribution to South Africa's primary energy supply from 1.5 percent to just over 4 percent. First gas is scheduled for early March 2004.

South Africa - Namibia
To facilitate the trade in natural gas between Namibia and South Africa, a gas trade agreement was signed by the respective ministers on 1 August 2003.

National gas development

A National Gas Infrastructure Development Plan has been drafted to provide the government with a blueprint for the development of an infrastructure for future gas market developments. It is the DME's intention to coordinate development on the east and west coast of South Africa via this plan.

Government players

• iGas is the official state agency for the development of the hydrocarbon gas industry in Southern Africa.
• PetroSA; the government-owned oil and gas company has been given the mandate by cabinet to lead developments in gas infrastructure in the Western Cape.
• Petroleum Agency of South Africa has the responsibility to promote the exploration and exploitation of natural oil and gas, both onshore and offshore, in South Africa and to undertake the necessary marketing, promotion and monitoring of operations.
• Petronet owns, operates, manages and maintains a network of 3 000km of high-pressure petroleum and gas pipelines, on behalf of the South African government.

Source: South Africa Yearbook 2005/2006