South African Business 2023

OVERVIEW
(LNG) to Maputo and continue from there to the Sasol plant at Secunda.
The Liquefied Natural Gas Independent Power Producer Procurement
Programme (LNG IPPPP) is part of the broader programme of the
National Department of Mineral Resources and Energy which encourages
private investment in renewable energy, namely the Renewable Energy
Independent Power Producer Procurement Programme (REIPPPP). The
total allocated to gas-to-power in the national power plan is 3 726MW, of
which 3 000MW is for LNG.
Three natural gas exploration permits have been awarded to Tosaco
Energy for the sandstone-rich area between Amersfoort and Balfour in
the western part of Mpumalanga by Petroleum Agency South Africa
(PASA). Tosaco Holdings has a 25% stake in Total SA. Two methane-gas
exploration rights have been granted to Highland Exploration in the
Evander area. PASA regulates exploration and production activities,
and acts as the custodian of the national petroleum exploration
and production database.
Gas is expanding
What to do with redundant power stations is a question testing the
best minds in the country. Eskom has decided that some of its sites
can become locations for renewable energy plants, given that they are
already connected to the grid.
And in 2022 came news that Majuba Power Station is the site of a
successful bid to drill for gas. Australian company Kinetiko Energy aims to
supply Majuba’s 20MW gas generator with fuel. Majuba is one of Eskom’s
many coal-fired power stations which are facing closure in the province
of Mpumalanga and one of several that might be switched to gas.
Kinetiko has a further two sites where it will do exploratory
drilling: one near Sasol’s Secunda synthetic fuel plant and one to
the south of that. A major milestone was achieved in July 2022 for the
Virginia Gas Project, owned by Renergen subsidiary Tetra4. That was
when “natural gas to plant” was achieved. This test allows for the system
to be comprehensively tested, with the inlet line from the gas-gathering
system opened to the process plant and then on to the natural gas
filtration and pre-compression system.
In September, commercial operations of the company’s liquified
natural gas (LNG) plant began. Helium production will follow.
Whereas it took nine years to find the R1.2-billion needed to fund the
first phase of Virginia Project, investors are now looking very keenly at its
prospects. An amount of R3.6-billion has been invested by Ivanhoe Mines
ONLINE RESOURCES
Council for Geoscience: www.geoscience.org.za
Petroleum Agency South Africa: www.petroleumagencysa.com
South African Oil and Gas Alliance: www.saoga.org.za
South African Petroleum Industry Association: www.sapia.co.za
to secure some offtake rights and the
Central Energy Fund has purchased a
10% stake in Tetra4 for R1-billion.
Sproule, a resources accreditation
agency, has given an updated report
on the helium and methane reserves
in the Virginia gas field. The results
were even more positive than
previous estimates, with helium
reserves up by 620% and methane
reserves by 427%. The field covers
187 000ha in the region of Virginia,
Theunissen and Welkom.
The SpaceX rocket that
launched in 2021 used 11 tons
of helium to propel itself off the
ground. Every computer microchip
in the world is produced in the
presence of helium and the world
uses 85 tons of it every day. Exciting
offshore gas discoveries have also
been made in recent years. Total
and its partners first announced
success at a site called Brulpadda
off the coast of Mossel Bay. The
nearby Luiperd prospect in Block
11B/12B delivered more exciting
news when gas condensate was
also found there.
The block, in the Outeniqua
Basin 175km off the southern coast,
covers an area of about 19 000km² in
water depths of 200m-1 800m.
The two finds raise the odds
of Total investing in what it calls
a “world-class” offshore gas site.
The drilling campaign employed
195 South Africans with specialist
skills but the potential spinoff is
enormous for the Western Cape
and South Africa, if the find leads to
drilling and commercialisation.
PASA has noted the significance
of international oil companies
committing to exploration
off South Africa’s coast. More
exploration will guarantee that
interest is maintained. ■
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SOUTH AFRICAN BUSINESS 2023