Draft Gas Master Plan released amid supply 'cliff' warnings

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South Africa's much-delayed draft Gas Master Plan (GMP2024) has been released for public comment by Mineral Resources and Energy Minister Gwede Mantashe, amid indications that the gap between demand and supply will grow steeply from 2026 onwards when Sasol ceases to supply Gauteng and KwaZulu-Natal industrial customers with gas imported from Mozambique.
The document includes four scenarios, including a base case that shows that gas demand will far exceed supply in the short-term and that the gap, which has been described as an anticipated 'gas cliff', will worsen as demand grows.
It has also been published against the backdrop of an anticipated growth in gas-to-power generation, with a public procurement programme under way and Eskom also pursuing its own large-scale greenfield and diesel-to-gas conversion initiatives.
The draft GMP2024 recommends that South Africa should focus on the importation of liquefied natural gas (LNG) over the short- to medium-term to meet demand and pursue regional supply options to mitigate the supply shortfall anticipated between 2026 and 2030.
"Government-to-government agreements could be relevant instruments to unlock such regional projects," the document states.
However, it also recommends that indigenous natural gas production be pursued to diversify supply in a way the minimises geopolitical risk and improves prospects for competitive prices.
"The country should, thus, strike a balance between domestic/indigenous gas, piped imports and LNG imports to ensure diversification of supply and reduce risks to security of supply," the draft document recommends.
The GMP2024 focuses on reducing the total cost of supply, localisation and supporting energy security, but makes little reference to South Africa's climate commitments, stating only that gas could support a shift away from unabated coal-based electricity production.
In a statement, the Department of Mineral Resources and Energy described the draft GMP2024 as a policy instrument that sought to ensure security of gas supply by diversifying supply options from both local and international markets.
"It outlines the role of natural gas in the context of energy mix and provides policy direction to the industry in South Africa," the department stated.
It added that the plan considered the complete gas topology ranging from demand, supply, importation, infrastructure, and distribution networks.
"It recognises the critical role of natural gas in the country's economy, and anticipates the infrastructure required for the delivery of gas at a point of consumption based on a least-cost model."
A deadline of June 15 was set for the submission of written comments