As part of efforts to reduce South Africa’s reliance on coal-fired power, the country is setting up a Gas Industrialization Unit to import liquefied natural gas (LNG).

According to the Deputy-director General at the Department of Trade and Industry, Garth Strachan (photo), this unit will originally concentrate on importing LNG and will also seek to tap domestic sources of natural gas.“We’ve got to ensure that oil and gas industrialization has to be one of the pillars of industrialization going forward,” he said.

Suppliers, including Cheniere Energy Inc., are interested in supplying South Africa’s gas-to-power program which entails adding 3,126 megawatts of capacity between 2019 and 2025. These suppliers are currently waiting for fuel tenders for yearly shipments of not less than 3 million tons.This could involve a yearly LNG imports of around $530 million.

The new industrialization unit is subjected to the final approval from the Energy Ministry and will reflect regional gas deliveries from Mozambique and Botswana.

South Africa last week announced plans for a legislation to modify rules for the production and transportation of natural gas, thereby making it easier to develop shale-gas reserves in the country’s semi-desert Karoo region, Bloomberg reports.

Anita Fatunji