By Nkosana Khumalo
Eskom and Sasol signed a Memorandum of Understanding (MoU) on Friday, 20 September 2024, to explore the potential of Liquefied Natural Gas (LNG) as a sustainable solution for the country’s looming gas shortages. The collaboration aims to mitigate the imminent shortfall in gas supply while driving the country’s energy transition toward decarbonisation. This landmark agreement brings together two of South Africa’s energy giants, Eskom and Sasol, to research and explore viable LNG solutions that will enable the long-term supply of energy in the region.
The MoU represents a pivotal step towards securing South Africa’s energy future, especially as the nation continues to face significant challenges related to power generation. The partnership is expected to unlock new opportunities for gas users in the country, while also contributing to South Africa’s broader goals of reducing its carbon footprint and ensuring energy security.
Exploring LNG as a Sustainable Solution
The MoU will allow Eskom and Sasol to research the potential volumes of LNG required to sustain South Africa’s growing energy needs. This collaboration is geared towards establishing a viable LNG import market, with a particular focus on government-to-government relations where necessary. By scaling up gas supply for power generation, South Africa can transition away from its heavy reliance on coal-based energy while ensuring a steady supply of base-load electricity.
Eskom’s Group Chief Executive, Dan Marokane, emphasized the importance of this partnership in addressing the nation’s energy challenges:
“We have a great deal of experience as the two largest users of coal in South Africa, and we felt that by working together, we could accelerate the climate change transition in a responsible way which sets the country up for the best economic, environmental, and social outcomes and addresses the imminent gas supply shortfall.”
Marokane’s remarks highlight the critical role LNG will play in balancing South Africa’s energy mix, combining existing coal and nuclear power with renewable energy, storage systems, and gas.
Sasol’s President and CEO, Simon Baloyi, echoed this sentiment, underlining the company’s commitment to ensuring South Africa’s energy security:
“As a leading energy player in South Africa, we are excited to collaborate with Eskom to transform the regional energy landscape. By leveraging our combined technical, operational, and project execution expertise, we are committed to enhancing regional energy security and driving development.”
Baloyi went on to explain how this collaboration is expected to unlock new growth opportunities and position LNG as a key enabler of re-industrialisation in South Africa, with gas emerging as a cleaner, more efficient source of energy.
Impact on South Africa’s Energy Landscape
This collaboration between Eskom and Sasol is being hailed as a major step towards reshaping South Africa’s energy infrastructure. The partnership aligns with South Africa’s Gas Master Plan, which outlines the country’s strategy for developing a robust gas supply network within the Southern African Development Community (SADC) and other regions. The MoU will explore various LNG sourcing options, both locally within South Africa and across the continent, to secure long-term contracts for gas supply.
With the global energy sector increasingly shifting from coal to gas as a cleaner alternative, this initiative also places South Africa in a stronger position to meet its climate commitments. Gas emits significantly less CO₂ per unit of energy compared to coal, and the shift towards gas could help South Africa meet its decarbonisation targets.
Dr. Kgosientsho Ramokgopa, South Africa’s Minister of Electricity and Energy, delivered the keynote address at the signing ceremony, reinforcing the government’s support for this initiative. Ramokgopa emphasized the importance of LNG in ensuring energy security while aligning with the country’s climate goals:
“We have made it clear that we are serious about LNG solutions for the country, and that our demand for gas across both industrial and energy frontiers will unlock these solutions.”
Ramokgopa’s remarks underscored the government’s commitment to working with private sector players like Eskom and Sasol to ensure that South Africa’s energy transition is both sustainable and economically viable.
Driving the Energy Transition and Decarbonisation
At the heart of this collaboration is a shared vision to support South Africa’s energy transition. The initiative will not only help mitigate the short-term gas supply challenges but also contribute to the long-term decarbonisation of South Africa’s energy system. By increasing the use of gas in power generation, the country can reduce its dependence on coal, which has been a major contributor to South Africa’s carbon emissions.
Aligned with global trends, many countries are making the shift from coal to gas, recognising that gas offers a more environmentally friendly alternative. This collaboration comes at a critical time, as South Africa seeks to diversify its energy sources while maintaining a steady supply of electricity to meet the growing demands of its economy.
Marokane highlighted the importance of a balanced energy mix in achieving these goals:
“Eskom is focused on a balanced and diversified energy mix based on existing coal and nuclear and introducing gas for baseload power, as well as renewables, energy storage systems, and pumped hydro, to achieve overall security of supply.”
This strategy aligns with South Africa’s broader goals of ensuring energy security while contributing to the fight against climate change.
Unlocking LNG Potential for Power Generation
The collaboration between Eskom and Sasol will involve an intensive research and planning phase, supported by both companies’ technical teams. This research will explore the best prospects for LNG supply within South Africa, as well as potential partnerships with other state entities to develop a complete LNG value chain across the region.
The initial focus will be on unlocking global LNG resources and identifying the necessary infrastructure to import and distribute LNG to power stations across South Africa. This will include evaluating long-term LNG contracting options to meet Eskom’s planned coal power station repowering and conversion to gas.
Sasol’s strategic gas partnerships are expected to play a critical role in enabling future LNG supplies for South Africa. According to Baloyi, Sasol is working on enabling the supply of LNG by collaborating with Eskom and various infrastructure developers to create a sustainable gas market:
“Our focus is on enabling the future supply of LNG to South Africa by collaborating with companies such as Eskom, existing and future customers, suppliers, and infrastructure developers.”
Download Here:
Central News Weekly Edition 073 | Download the latest weekly edition| Top Story: “R180,000 in Prizes at Edgar Legoale Festive Soccer Tournament 2024”
Read all our publications on magzter:
Central News also offers Sponsored Editorial Content, Podcasts , Radio / Social Media Simulcast, Video Production , Live Streaming Services, Press Conferences, and Paid Interviews (Video/Audio) etc.
We guarantee exceptional exposure, reach, and engagement, with an excellent return on investment.
Advertisement:
To place your advert on our platforms (Print Newspaper or Digital Platforms) : Please email : sales@centralnews.co.za
For Business Related:
business@centralnews.co.za
Newsroom:
Send your Stories / Media Statements To: newsroom@centralnews.co.za
General Info:
info@centralnews.co.za
Office Administrator:
admin@centralnews.co.za
Whatsapp / Call: 081 495 5487
Website: https://www.centralnews.co.za
Social Media Platforms (@centralnewsza) : Linkedin, Facebook, Tiktok, Twitter, Instagram, Youtube
#centralnewsza #freestate