South Africa faces major challenges in securing its gas imports

South Africa is at a decisive turning point in its energy transition, facing complex challenges to secure its natural gas supply and ensure the stability of its energy sector.

Share:

South Africa, in the midst of its energy transition, must manage a delicate balance between reducing its dependence on coal and securing its natural gas supply.
The transition to gas is imperative, but faces a number of obstacles, including delays in exploiting local discoveries and the inadequacy of existing infrastructure.
The 2024 Gas Master Plan attempts to address these challenges, but implementation remains hampered by financial and technical obstacles.
The ability to secure natural gas supplies relies on a combination of liquefied natural gas (LNG) imports and the exploitation of regional gas resources.
However, slow investment in critical infrastructure, such as pipelines and import terminals, and uncertainty over the development of domestic gas projects, accentuate the risk of shortages.

Increased risk of gas shortages and the industry’s response

The announcement that Sasol will stop supplying gas via the Rompco pipeline from 2027 is a wake-up call for the sector.
This decision, coupled with the gradual closure of Eskom’s coal-fired power plants, exacerbates the risk of gas shortages.
Demand for gas-fired power plants is growing, but domestic and regional sources of supply are struggling to meet projected needs.
Commodity Insights’ projections indicate a growing dependence on LNG imports, which could account for up to 87% of gas supply by 2050.
This situation exposes the country to fluctuations in international gas prices and currency risks.
Industry players stress the need for long-term contracts to secure supplies, and for investment in infrastructure to minimize these risks.

Regional outlook and strategic challenges

Regional collaboration offers a potential solution for mitigating gas supply risks.
Recent gas discoveries in Namibia offer an interesting opportunity for South Africa, although the lack of cross-border infrastructure currently complicates any rapid integration.
Discussions on better regional energy integration, combined with optimization of available resources, remain crucial to ensuring sustainable energy security.
South Africa’s energy sector will be able to navigate this uncertain environment with the help of rigorous strategic planning and strengthened regional partnerships.
The main challenge remains to guarantee a reliable and competitive gas supply, essential to support the country’s energy transition and preserve economic stability.

The commissioning of LNG Canada, the first major Canadian liquefied natural gas export facility led by Shell, has not yet triggered the anticipated rise in natural gas prices in western Canada, still facing persistent oversupply.
Horizon Petroleum Ltd. is advancing towards the production launch of the Lachowice 7 gas well in Poland, having secured necessary permits and completed preliminary works to commence operations as early as next August.
European Union member states have requested to keep their national strategies for phasing out Russian gas by 2027 confidential, citing security concerns and market disruption risks, according to a document revealed by Reuters.
TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.
Naftogaz announces the launch of a natural gas well with a daily output of 383,000 cubic meters, amid a sharp decline in Ukrainian production following several military strikes on its strategic facilities.
Sonatrach and ENI have signed a $1.35 billion production-sharing agreement aiming to extract 415 million barrels of hydrocarbons in Algeria's Berkine basin, strengthening energy ties between Algiers and Rome.
Maple Creek Energy is soliciting proposals for its advanced 1,300 MW gas project in MISO Zone 6, targeting long-term contracts and strategic co-location partnerships with accelerated connection to the regional power grid.
VMOS signs a USD 2 billion loan to finance the construction of the Vaca Muerta South pipeline, aiming to boost Argentina's energy production while reducing costly natural gas imports.
According to a Wood Mackenzie report, Argentina could achieve daily gas production of 180 million cubic metres per day by 2040, aiming to become a key regional supplier and a significant exporter of liquefied natural gas.
Côte d'Ivoire and the Italian group Eni assess progress on the Baleine energy project, whose third phase plans a daily production of 150,000 barrels of oil and 200 million cubic feet of gas for the Ivorian domestic market.
The extreme heatwave in China has led to a dramatic rise in electricity consumption, while Asia records a significant drop in liquefied natural gas imports amid a tight global energy context.
E.ON, together with MM Neuss, commissions Europe’s first fully automated cogeneration plant, capable of achieving a 91 % fuel-use rate and cutting CO₂ emissions by 22 000 t a year.
Facing the lowest temperatures recorded in 30 years, the Argentine government announces reductions in natural gas supply to industries to meet the exceptional rise in residential energy demand across the country.
Solar power generation increased sharply in the United States in June, significantly reducing natural gas consumption in the power sector, despite relatively stable overall electricity demand.
Golden Pass LNG, jointly owned by Exxon Mobil and QatarEnergy, has asked US authorities for permission to re-export liquefied natural gas starting October 1, anticipating the imminent launch of its operations in Texas.
Delfin Midstream reserves gas turbine manufacturing capacity with Siemens Energy and initiates an early works programme with Samsung Heavy Industries, ahead of its anticipated final investment decision in the autumn.
Norwegian group DNO ASA signs gas offtake contract with ENGIE and secures USD 500 million financing from a major US bank to guarantee future revenues from its Norwegian gas production.