1 April 2025
https://www.linkedin.com/pulse/gas-supply-concerns-remain-after-parliamentary-8bdoe/
On 19 March, the Department of Electricity and Energy (DEE) presented to the parliamentary portfolio committee on electricity and energy regarding plans to address South Africa’s impending gas supply shortfall, expected in 2028. IGUA-SA representatives attended this critical session to understand government’s approach to this looming challenge that threatens our industrial base.
Unfortunately, the briefing revealed concerning gaps in the government’s strategy. Despite Minister Ramokgopa acknowledging the urgency of the situation – highlighting impending job losses and damage to the fiscus – the presentation lacked substantive and discernible strategies to address the imminent gas cliff.
The absence of clear timelines and concrete initiatives is particularly troubling. While the DEE indicated engagement with Qatar, the United States, Algeria, Namibia, and potentially Mozambique for future gas supply, these discussions appear preliminary. The gas-cliff challenge remains unresolved, and the development of necessary port infrastructure in time will be a significant obstacle.
On a positive note, the Minister emphasised the strategic importance of gas, describing it not as a transitional energy source but as a “destination” fuel vital to South Africa’s industrialisation. The DEE correctly highlighted domestic exploration as the preferred long-term solution. However, without specific details regarding timing and location, these aspirations remain theoretical.
Several critical concerns emerged from the briefing that require immediate attention:
- Lack of industry engagement. While the DEE claims to engage with industry stakeholders, our experience suggests otherwise. This disconnect means government lacks comprehensive understanding of the risks facing industrial users at both strategic and operational levels.
- Insufficient infrastructure planning. Midstream infrastructure planning and comprehensive gas master planning appear non-existent, creating a significant blind spot in the national energy roadmap.
- Lack of governmental coordination. There is insufficient coordination between departments, with the DEE discussing upstream exploration despite this mandate residing with the Department of Mineral and Petroleum Resources.
- Lack of integrated planning. The department could not confirm when an integrated energy plan for South Africa – including the Gas Master Plan – will be adopted. This is a failing in terms of the energy-security mandate the government has for the country.
- Lack of clarity around assumption of risk. The DEE could not clarify how it is approaching the gas cliff from a risk perspective, and could not provide details of the roles the government and private sector need to play.
The energy security of our industrial sector – and by extension, South Africa’s economic stability – depends on concrete, time-bound solutions to the impending gas cliff. IGUA-SA remains committed to advocating for our members’ interests in this vital matter. We will continue to pursue direct engagement with relevant government departments to ensure industrial gas users’ concerns are properly represented in policy development.