MASSIVE new discoveries of natural gas off the Mozambique coast have made a complete rethink of South Africa’s energy and electricity plans essential says the Cape Chamber of Commerce.
The gas was discovered some time ago but in the last few weeks it has become clear that the resource is a major world find and now appears bigger than the North Sea discovery.
“This means that South Africa’s Integrated Resources Plan prepared last year is now obsolete and the National Planning Commissions report will also have to be revised,” said Mr Michael Bagraim, President of the Chamber.
This week the US company Anadarko Petroleum announced that test drilling showed usable reserves of 15 to 30 trillion cubic feet or Tcf. To put this in perspective the UK’s total gas reserves are just 9 Tcf .
This follows the announcement last month by the Italian company Eni that it had found reserves of 22.5 Tcf in the same region.
Oil industry experts now think the two finds indicate the existence of a more extensive oil and gas field off the East African coast and they are confident of more major discoveries.
“The significance for South Africa is that these discoveries should wipe the Nuclear option off the table. We now have enough gas on our borders to generate all the electrity we could ever use. It will be the easy way to reduce our carbon emissions,” Mr Bagraim said.
The discoveries would boost economic development in the region and open the way for co-operation on major projects such as turning gas into petrol and diesel as well as increased trade.
Mr Peter Haylett, chairman of the Chamber’s Industrial Focus portfolio committee, pointed out that the price of natural gas had fallen in recent years and in both the US and the UK new combined-cycle gas power stations were producing electrity at lower costs than either coal or nuclear power stations.
“They are also clean and they can be built in two to three years compared to the eight to 12 years for coal and nuclear power stations. This means early relief from the electrity rationing that is holding back growth in mining and other areas.”
He said the 2010 Integrated Resource Plan had seen only a minor role for gas in South Africa “but these discoveries change everything. An urgent rethink is now essential because gas will give us a new form of energy for process heat in industry as well as early supplies of electrity. We must start thinking gas wherever possible because it is the fuel of the future. Sasol has already invested heavily in Mozambique and in gas and it is time for Eskom and others to wake up and make the most of these new opportunities,” Mr Haylett said.