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The South African energy landscape is currently grappling with a profound sense of urgency as the nation faces a potential industrial disruption triggered by the impending depletion of natural gas supplies from Mozambique. As coal-fired power stations are decommissioned to meet environmental goals, the need for stable baseload energy has moved to the forefront of national discourse. Experts increasingly agree that the current fragmented approach to energy planning must be replaced by a far more coordinated effort to develop gas import infrastructure and gas-to-power capacity. While there is a broad consensus that liquefied natural gas (LNG) imports are inevitable to replace traditional pipeline gas, the path forward remains obstructed by significant infrastructure delays, slow procurement processes, and a thicket of regulatory and legal challenges.
Historically, the South African gas sector has been relatively small but strategically vital, relying heavily on the 865 km Rompco pipeline that has supplied industrial users since 2004. However, with demand standing at approximately 185 PJ annually, the transition to imported LNG signals a sharp economic shift. The required regasification infrastructure and mid-merit projects are expected to drive gas prices up by as much as 50%, a cost escalation that industrial users must prepare for even as the government finalises the 2024 Gas Master Plan. The Integrated Resource Plan 2025 sets ambitious targets, aiming for 6,000 MW of new gas-to-power capacity by 2030 and a staggering 16,000 MW by 2039. These goals position natural gas as a critical transition fuel intended to provide the flexible, dispatchable generation needed to support the integration of intermittent renewable energy sources.
Despite these policy frameworks, the execution of gas projects remains sluggish. The Gas Independent Power Producer Procurement Programme (GASIPPPP) has seen its bid deadlines extended, and critical projects like the Zululand Energy Terminal in Richards Bay are currently stalled pending clarity on Eskom’s own power projects. Legal setbacks, such as the Supreme Court of Appeal halting Eskom’s Richards Bay project due to consultation issues, have further complicated the timeline. Industry leaders warn that if the current pace of development continues, the earliest commissioning for new large-scale plants may not occur until 2032. This creates a dangerous gap, as Eskom’s mid-term outlook predicts a severe baseload shortage as early as 2030, potentially leaving the South African economy in a precarious position.
In response to this potential “gas cliff,” various stakeholders are exploring alternative supply routes and collaborative models. These include connecting to Mozambique’s Matola terminal, exploring new discoveries in the Venus field in Namibia, and developing LNG-to-power projects in Durban. Industrial users have even formed an aggregator, GasHub, to leverage their combined purchasing power and negotiate competitive LNG prices. However, many experts believe that these private initiatives cannot succeed in isolation. There is a growing call for a high-level government intervention, similar to the National Energy Crisis Committee, to align departments and ensure that timelines are strictly met to maintain industrial competitiveness and energy security.
“The question is no longer whether South Africa should have gas in its energy mix, but how to move from conception to implementation.”
