SA to upscale LNG potential in energy mix
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JOHANNESBURG - THE DEPARTMENT of Mineral Resources and Energy (DMRE) said the government was scaling up the country’s liquefied natural gas (LNG) potential as part of pursuing a diversified energy mix that moves away from fossil fuels.
Speaking during the department’s virtual budget vote, Minister of Mineral Resources and Energy Gwede Mantashe said the government had undertaken an environmental impact assessment study for three gas-to-power plants of 1000 megawatts (MW) each to enable gas-to-power projects in special economic zones.
“The request for proposals will be issued in the third quarter of the 2021/22 financial year,” said Mantashe. He said an estimated total capital investment for 15 projects currently under construction, as licensed by the National Energy Regulator of South Africa, was R8.9bn.
“From these projects, at least four of them with a value of approximately R6.3bn are expected to be completed by the end of 2021,” said Mantashe.
The focus on LNG comes as Parliament finalised the amendment to the Gas Amendment Bill introduced to Parliament at the end of April. Mantashe said the bill aimed to unlock investment into the gas sector and facilitate infrastructure development.
“What we are noticing is that the space of LNG is very attractive to people who want to make quick money. It must be planned carefully and implemented properly. We must not allow scavengers to fill that space and want to eat quickly and be full. If we don’t do that they are going to steal the LNG initiative. It is our responsibility as the department to protect that space,” said Mantashe.
Mantashe, who was addressing law makers in the midst of Eskom’s load shedding, said that the government was meeting its commitments to deal with power outages and was focused on increasing power generation outside the state-owned power utility.
Mantashe said among steps taken was the connection of 1 200MW to the grid from projects signed under bid window 4 of the Independent Power Producers (IPP) programme, with the remaining 1 000MW planned to connect by no later than December 2021. The DMRE had approved eight preferred bidders with three recommended for appointment subject to them meeting specific value for money conditions.
“This initiative will deliver a total of 1995MW of power into the grid within the next 12 to 18 months,” said Mantashe. He also said Eskom had procured 200MW from IPP under the short-term power purchase programme.
In terms of mineral and petroleum intelligence and development, Mantashe said the department was clearing the backlog in petroleum licences.
“We have set six months to ensure that a new modern system is put in place. The system seeks to ensure provision of reliable and precise information on location of exploration and mining rights. In addition, the system will be transparent and easily accessible to investors and the public,” Mantashe said.
He also said as part of export to boost mining investment, the department was developing an “exploration strategy” to increase our share of the global expenditure in the next three to five years.
“The Council for Geoscience has rapidly increased mapping coverage from below 5 percent to almost 9 percent to date, with particular focus on areas with the greatest potential for recovery of world-class minerals needed to drive the contemporary economy,” said Mantashe.