Johannesburg - The local gas industry eagerly awaits more information from the government on the mooted gas-to-power programme.
Speaking at a panel discussion at the manufacturing indaba yesterday, SA Oil and Gas Alliance chief executive Niall Kramer said the industry was waiting for an information memorandum on the government’s plans to initiate the gas independent power producers programme.
“That will give us certainty on the shape of deals that we can have,” said Kramer.
The information would enable industry players to determine the skills required for the gas economy.
“How do you map existing skills to a (natural gas) opportunity,” he said.
The National Treasury and the Department of Energy earlier this year announced the government’s plans to procure 3 126 megawatts for the private sector, along the same principles as the renewable energy procurement programme.
Minister of Energy Tina Joemat-Pettersson last month said the Department of Energy would issue the information memorandum in the second quarter of the 2016/17 financial year, before commencing with formal procurement later this year. Such a move, Joemat-Pettersson said, would boost investor confidence.
The Department of Trade and Industry (dti) earlier this year set up a gas industrialisation unit to oversee the development of South Africa’s gas economy through the introduction of various gas supply options.
Kishan Pillay, the dti head of oil and gas, said the department established the unit to create policy certainty and coherence in the gas economy.
As part of the Industrial Policy Action Plan 2016 (Ipap 2016), the dti has introduced a programme to ensure “gas-based industrialisation” that would entail leveraging natural gas for power generation and industrial processes. The government has said that the initial stages of the development of the gas industry would be anchored on the mooted gas-to-power programme.
Khwezi Tiya, an oil and gas executive at Standard Bank, said financing gas projects – once the gas was in South Africa – would depend on the nature of the gas projects and whether there was an offtake agreement. He added that companies could choose a combination of finance from commercial banks and development finance institutions.
Speaking on the same panel, Doug Kuni, the chief executive of JSK Consulting, said given their flexibility, gas power plants could provide mid-merit and peaking capacity.
“The gas power plants are ideally suited for the imported gas,” said Kuni.
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