South Africa is eyeing Nigeria’s gas to boost operations its proposed liquefied natural gas (LNG) import facility.
The facility likely to cost $1.4 billion would be located at the west coast port of Saldanha Bay and would feed gas-to-power projects with the aim of easing chronic supply shortages in that country.
Importing LNG is among the options South Africa is considering to diversify its energy sources away from coal and ease power shortfalls that have curbed growth.
Several companies, including Shell, Mitsubishi and Sasol, are expected to bid for 3,126 megawatt (MW) gas-to-power projects in the first quarter of 2016, when exact details will become known.
“Saldanha Bay ticks all the boxes,” Fernel Abrahams, project manager for the LNG project at the Western Cape provincial government told Reuters.
“It makes economic sense, it will help improve energy security and all our studies around ocean conditions, demurrage and market growth show it is technically feasible to land gas here.”
Abrahams said Nigeria and Angola were among likely source markets for the LNG.
The country is close to new oil and gas strikes offshore of Mozambique and Tanzania, as well as existing fields from Africa’s top two oil producers Nigeria and Angola.
He said the plan would be to build an import facility at, or close to Saldanha Bay, South Africa’s deepest natural port and emerging oil and gas hub, with pipelines supplying enough gas for power plants to supply thousands of industrial users and homes stretching to Cape Town around 150 km (90 miles) away.
Richards Bay in KwaZulu-Natal province and Coega in Eastern Cape province have also been mooted as possible sites for an LNG import terminal.
Faster to install compared with nuclear or coal-fired power plants, the proposed terminal will allow the authorities to take advantage of favourable global LNG prices.
South Africa plans to add 9,600 MW of nuclear power in the next decade and a half, estimated by analysts to cost as much as $100 billion.
For the gas-to-power projects, the government has said it is looking at power barges – floating power plants installed on a barge – and gas-fired power plants, although details have not yet been finalised.
Abrahams said the proposed LNG project would also supply gas to state-owned power utility Eskom’s Ankerlig 1,327 MW diesel-fired open cycle gas turbine (OCGT) power station at Atlantis, also on the west coast.