On the back of several major gas finds in the country’s on- and offshore in recent years, South Africa is poised to expand the role of liquefied natural gas (LNG) in its energy mix. The country published its Integrated Resource Plan in October 2019, which envisages the development of an additional 8,100 MW of gas-fired power generation capacity by 2030 to support energy security, while making up for the shortfall of its ailing coal-fired power plants.
With estimated resources of approximately 60 trillion cubic feet of gas offshore, South Africa’s gas production is expected to increase by a compound annual growth rate of 48% between 2023 and 2027. Gas-fired power production is poised to dramatically reduce South Africa’s reliance on electricity imports, while creating employment opportunities and supporting the country’s transition to cleaner fuel sources.
Brulpadda-Luiperd Conventional Gas Field
With the potential to transform the South African oil and gas industry, the Brulpadda-Luiperd discoveries by TotalEnergies – made in 2019 and 2020, respectively – are estimated to contain a combined 3.4 trillion cubic feet of gas. The project is currently in its approval stage and is expected to start commercial operation by 2026, with its Final Investment Decision poised for approval in 2024.
Development of the project requires an estimated two billion dollars and will involve the drilling of three wells in an area spanning 19,000 km2 in South Africa’s offshore Block 11B/12B in the Outeniqua Basin. TotalEnergies serves as operator of the block with a working interest of 45%. The remaining interest is held by QatarEnergy (25%), Canadian Natural Resources (20%) and Main Street (10%) – a consortium between Arostyle Investments and Africa Energy Corporation.
Ibhubesi Conventional Gas Field
Currently in its Front-End Engineering Design (FEED) phase, the Ibhubesi Conventional Gas Development is expected to start commercial production in 2025 to the tune of $1.41 billion. The gas field will involve the drilling of approximately 14 wells and will include the development of a Floating Production Storage and Offloading unit, a subsea manifold, subsea tree and tension leg platforms.
Operated by South African gas explorer, Sunbird Energy, the gas field is situated in Block 2A in the country’s Orange Basin. Once operational in 2025, the project is poised to leverage an onsite gas-processing plant to enable the supply of processed gas to potential buyers, including the country’s national electricity utility, Eskom, independent power producers and industrial consumers. The field is estimated to contain approximately eight trillion cubic feet of gas reserves, making it South Africa’s largest independently-developed gas initiative.
E-BK Conventional Gas Field
Situated in Block 9 in shallow waters offshore South Africa, the E-BK Conventional Gas Development is currently in the FEED stage and is expected to start commercial operation in 2024. The field is operated by the country’s state-owned Petroleum Oil and Gas Corporation of South Africa (PetroSA) and will involve the drilling of up to 19 exploration and development wells, which will be tied back to the existing South Coast Gas Conventional Gas Development and offshore FA Platform pipeline.
Amersfoort Coalbed Methane Field
Owned and operated by natural gas exploration company, Kinetiko Energy, through its recently-acquired oil and gas development company, Afro Energy, the Amersfoort Coalbed Methane Field Development is expected to start commercial operation in 2024 and will involve the drilling of approximately 100 wells.
The Amersfoort gas-to-power project will include the use of gas produced from the town of Amersfoort, Mpumalanga Province to power a containerized generator, which will be integrated into the country’s power grid. The project will be implemented in a phased development process in partnership with independent energy supplier, Vutomi Energy, with the first stage targeting 1 MW of output, which will be increased by 500% in the third stage.
Orange Basin – Block 3B/4B
Last March, Canadian oil and gas company, Africa Oil Corporation, identified significant oil and gas resources in Block 3B/4B in the Orange Basin, offshore South Africa. A 3D seismic analysis of the block, conducted by RISC Advisory and covering an area of 2,200 km2, resulted in the discovery of approximately four billion barrels of oil equivalent and up to 24 prospective natural gas plays.
The discovery comes in the wake of five hydrocarbon discoveries made in neighboring Namibia’s Orange Basin, which include TotalEnergies’ Venus-1x and Shell’s Jonker-1X, Graff-1X, La Rona-1X and Lesedi-1X, all in the past 24 months. On the back of these successive finds, Kinetiko Energy announced its plans last August with South Africa’s national development finance institution, the Industrial Development Corporation, to develop an LNG project that will deliver up to 500 MW of gas-powered energy to the country. Estimated to cost up to $87 million, the project will be developed over the next nine to ten years.
As energy demand in the country and the SADC region continues to grow exponentially, recent natural gas discoveries have been described as game-changers for the South African economy, serving to stabilize the country’s energy network while reducing greenhouse gas emissions, playing a critical role in the government’s efforts to re-industrialize and catalyze socioeconomic development.