Total, Gigajoule LNG joint venture may help stimulate SA’s fledgling gas sector

A JOINT venture between Total and Gigajoule, a clean energy project developer, may stimulate South Africa’s fledgling gas sector, said BusinessLive.

In terms of the joint venture, liquefied natural gas (LNG) will be delivered by Total to a storage facility in Matola harbour near Mozambique’s Maputo which will be connected to a gas-fired power plant. Gas will then be fed into South Africa’s gas network from the power plant using infrastructure owned by a company – Matola Gas Company – in which Gigajoule is a shareholder, said BusinessLive.

In terms of South Africa’s Integrated Resource Plan (IRP), about 3,000MW of gas-fired power will feed into the national power grid by 2030. Gas is an important source of flexible power that helps to balance a power grid as more renewable power is introduced into a system. However, the IRP makes no provision for where the gas might come from, said BusinessLive.

Mozambique has significant gas resources in its Rovuma fields in the northern part of the country, but South Africa was unlikely to benefit from this owing to infrastructural limitations. The Matola facility will, therefore, provide the option of gas to South Africa in a shorter timeframe, said BusinessLive.

Paul Eardley-Taylor, Standard Bank’s head of oil and gas for Southern Africa, said the bank was excited by Matola’s potential contribution to solving regional energy challenges. “The agreement involves existing companies with specific skills to offer a fast-track deal.”

Matola Gas Company has infrastructure and operations while Total has the available LNG. “Crucially, the deal offers multiple routes to market in South Africa for existing gas demand areas, such as Gauteng and Mpumalanga, well ahead of any formal South African LNG import tender,” Eardley-Taylor said.

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