South Africa Sets Up LNG Import Unit for Gas-to-Power Program

South Africa is creating a unit to import liquefied natural gas for power plants as suppliers including

Cheniere Energy Inc. await fuel tenders for annual shipments of at least 3 million tons.

The Gas Industrialization Unit will initially focus on importing LNG as South Africa seeks to reduce its

dependence on coal-fired power, Garth Strachan, a deputy-director general at the Department of Trade

and Industry, said Monday in a presentation in Cape Town. Eventually, the unit will also seek to tap

domestic sources of natural gas, he said.

“We’ve got to ensure that oil and gas industrialization has to be one of the pillars of industrialization

going forward,” said Strachan.

Houston-based Cheniere is among companies interested in supplying South Africa’s gas-to-power

program, which plans to add 3,126 megawatts of capacity between 2019 and 2025. That could require

annual LNG imports of about $530 million, according to Trevor Sikorski, an analyst with Energy Aspects

in London.

“Almost anyone with gas is looking for demand at the moment, but the most competitive supply” for

South Africa would be from Nigeria, Angola, the U.S. and possibly Qatar, Sikorski said.

NGS INDIA