South Africa Moves to Develop Gas-to-Power Project

South Africa Moves to Develop Gas-to-Power Project

The Minister of Energy of South Africa, Tina Joemat-Pettersson, has stated that her department, in Q2 of the 2015/16 fiscal year, had solicited market information to assist in designing the Gas-to-Power programme, ESI Africa wrote.

Further, it was reported by Engineering News that the ministry has plans to procure a new 600MW gas-fired power generation project, and that it would be developed as a public-private partnership. Therefore, the private ‘strategic partner’ will work with the State-owned companies (SoCs) to implement the project, with private sector partners playing the lead role in developing, financing, operating and maintaining the facility.

Neither the gas source nor the location of the project is spelt out in the advert. However, it is understood that an assessment is under way for possible siting of liquefied natural gas (LNG) import capacity in Saldanha Bay, Coega and Richards Bay.

A recent report from the law firm Norton Rose, stated that although there will be various challenges in developing a Gas-to-Power project in South Africa, none of these are insurmountable. “The development and financing of gas-fired power plants is well understood by developers and lenders, as too is the development and financing of LNG import infrastructure. The key will be to secure long-term LNG supply and to ensure an appropriate risk allocation through these elements of the supply chain ending ultimately with Eskom,” it said.


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