South Africa accused of ignoring Mozambican gas

Johan de Vos, chief executive officer of the Pretoria-based energy firm Gigajoule, has accused the South African government of ignoring the huge natural gas reserves in Mozambique, according to a report in Monday’s issue of the South African daily “Business Day”.

De Vos found it “shocking” that South Africa’s revised 20-year Integrated Resource Plan (IRP) ignores the gas discoveries in the Rovuma Basin, off the coast of northern Mozambique. He pointed out that this is the world’s fourth-largest known natural gas deposit.

If South Africa were to plan to import Rovuma Basin gas, he said, this would solve the energy crisis faced by the South African electricity company Eskom, and would avoid the need to build further coal-fired power stations.

Gigajoule operates the natural gas transmission and distribution network in Maputo and Matola, drawing on the gas fields in Inhambane province. Gigajoule has also completed technical and feasibility studies which have demonstrated the economic viability of a 2,450km pipeline from the Rovuma Basin to Richards Bay in South Africa.

De Vos says such a pipeline would cost five billion US dollars. The study which Gigajoule commissioned from consultants VGI, says that two anchor clients in the form of gas-fired power stations could be built: one in Maputo and one in Richards Bay, with a combined electricity generation capacity of 5,000 megawatts. They would cost a further five billion dollars.

"We have worked for two years on this feasibility study and we know that if you build a 5,000 megawatt power station at the end of the pipeline this project is bankable," he declared.

He pointed out that, with a price tag of ten billion dollars, the pipeline-power station infrastructure investment was "cheaper than Medupi and will cost less to operate once all Medupi’s interest charges are added in".

He was referring to the Medupi dry-cooled coal-fired power station which Eskom is building in South Africa’s Limpopo province. When completed this will generate 4,800 megawatts, and will be the largest power station of its type in the world. A second giant coal-fired power station is under construction near Witbank, in Mpumulanga province, and there are plans for a third.

De Vos argued that, if plans to important Mozambican gas were made now, there would be no need for “Coal Three”, as the third power station is known. He was confident that, if construction of the pipeline were to start next year, gas could be delivered as from 2018.

"The Japanese are all over this," he said. "The Japanese prime minister was in Mozambique last week to sign agreements with the government on energy. We (South Africa) are doing nothing”.

The proposed gas pipeline is “technically feasible and it will have a massively positive social impact”, argued de Vos. “If we get everyone aligned, it can happen, it’s a window of opportunity that we have now and we shouldn’t let it go to waste, we shouldn’t go down the road of Coal Three when there is this opportunity right on the doorstep”.

The South African Integrated Resource Plan (IRP) cannot even be bothered to spell Rovuma correctly. It calls it “Romvula’, and claims that it is not being considered in South Africa’s gas scenario because of its distance and the cost of transporting liquefied natural gas.

In comments to the South African Department of Energy on the IRP, Gigajoule says the Rovuma Basin deposits are so large that they could meet all of South Africa’s electricity needs, currently about 40,000 megawatts, for the next 170 years.

Post published in: Africa News

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