Bulk liquid storage operator Bidvest Tank Terminals’ (BTT’s) R1-billion mounded liquefied petroleum gas (LPG) storage facility in Richards Bay, KwaZulu-Natal, is set to house the largest tanks in the world and is expected to greatly enhance LPG supply in Southern Africa once completed, the company has indicated.
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The facility will store LPG on behalf of independent LPG specialist Petredec, which ships the fuel from the US and the Middle East. LPG is produced as a by-product in the oil refining process.

Petredec sought an import facility specifically on South Africa’s East Coast, and Richards Bay was seen as the most suitable port to handle this capacity. Being able to receive larger shipments also makes product handling more cost effective, reducing overall logistics costs.

The port is also on Petredec’s shipping route and in close proximity to the main rail and road logistics routes going inland, particularly as most of the LPG will be used in Gauteng, the Free State and the North West. This logistics infrastructure is also of high quality.

The project, currently under construction, was initiated at the end of 2017 and is slated for completion in July 2020. It is expected to increase LPG supply in South Africa by 200 000 t/y, half the country’s current consumption of about 400 000 t/y.

Replacement Energy Source
BTT and Petredec are confident that there is demand for LPG, BTT MD David Leisegang tells Engineering News.

The companies believe that the greatest demand will stem from LPG’s use as a replacement energy source, such as a substitute for wood or paraffin for heating and cooking. The use of these energy sources is still quite prevalent in South Africa, especially in informal settlements and areas where there is not any reliable access to electricity.

Leisegang emphasises that the health benefits of LPG are “considerable”, compared with the energy sources mentioned, as are its safety credentials, as “many of the fires in informal settlements are [the result of] cooking with these sources of fuel”.

LPG has been identified by the World Bank as the most environment friendly of all fossil fuels; therefore, the facility is expected to assist in providing a viable, reliable, safer and more environment- friendly energy alternative.

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Energy solutions company Novo Energy on Friday launched a R130-million large-scale natural gas compression facility at the Highveld industrial park, in eMalahleni, Mpumalanga.

The facility provides cleaner, and more reliable and cost-effective energy, compared with coal and other petroleum products.

At the launch, CEO Andri Hugo said the facility would play a significant role in helping to unlock South Africa’s power constraints, while also reducing carbon intensity.

“South Africa is a coal-based economy with about 77% of electricity generated from coal and a large portion of transportation fuels derived from the same source. Add to that the large percentage of industrial processes that use coal and you have an entire industrial sector built around cheap coal and electricity.

“But we depend heavily on imported resources for our hydrocarbon supply and this has resulted in exposure to international energy supply uncertainty, issues of reliability and price volatility,” he pointed out.

He added that although South Africa’s gas market is small, accounting for only 3% of the energy mix, the inherent benefits have the potential to change the economy by stimulating economic growth, development stability and job creation.

“Africa has been blessed with an abundance of resources, including minerals, energy, natural resources and human capital. A combination of these, through industrial activity, can address most of the socioeconomic challenges we face.

“Natural gas will play an important role in our energy mix through power generation, thermo-industrial applications and transportation and the vast natural gas discoveries on the continent will provide the key to unlocking our gas economies,” Hugo further pointed out.

Novo business development manager Justin Austin, meanwhile, said natural gas was the simplest hydrocarbon available, making it suitable as a feedstock for fertilisers, plastics and energy applications.

Natural gas can also be used as a heating fuel for industrial, commercial and residential applications, steam generation and direct heating applications, natural gas-run vehicles and power generation, he pointed out.

The eMalahleni gas compression station is Novo’s thirteenth – and its largest – such facility.

Austin said the most important application for natural gas going forward would be for power generation in remote locations, especially for remote mines that do not have grid accessibility and are using diesel as an energy source.

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The UK yesterday hit a milestone of running without coal power for three days in a row – the longest coal-free period in the country since the 1880s.

It started on Saturday morning and ended on Tuesday, according to National Grid, hitting a total of 72 hours and 10 minutes.

Without coal on the grid, 33 per cent of the UK’s electricity came from gas, 20 per cent from windpower and 24 per cent from nuclear.

Then there was 8 per cent from imports from France and The Netherlands, 7 per cent from solar, 6 per cent from biomass, 1 per cent from hydropower and 1 per cent from pumped storage.

Coal accounted for less than 7 per cent of Britain’s energy mix last year and the government is to phase-out the fossil fuel completely by 2025.

Hannah Martin, Head of Energy at Greenpeace UK, said in response to the coal-free days: “As coal power is phased out to prevent environmental disaster, and nuclear power phases itself out through economic disaster, the government would be wise to support the cleanest and cheapest energy sources, onshore wind and solar.”

"Offshore wind has proven to be popular and able to provide affordable clean energy, as well as skilled jobs and fair bills. As we have more and more days without coal, we need to make sure it is replaced with the renewable technologies of the future."

UK power generator Drax may be able to end its coal-fired power operations ahead of the government’s 2025 deadline.

The company’s CEO believes Drax’s biomass and gas-fired power operations, coupled with battery storage, are capable of replacing any coal closures ahead of time.

“We’re exploring options for repowering our remaining coal units to use sustainable biomass and gas which we believe could help us to become coal free even earlier than the 2025 deadline,” Drax chief executive Will Gardiner said. 

Drax has converted three of its six power plant units to burn wood pellets and plans to convert a fourth unit to biomass later this year. Drax said it could replace the remaining two units with gas plants and up to 200 MW of battery storage. 

You can track the live mix of renewables, fossil fuels or imports used in Britain's energy mix through the University of Durham's website at www.durham.ac.uk/dei/dashboard

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The Western Cape Government's bid to secure cleaner forms of energy received a boost due to a R10 million grant from the United States Government through its Trade and Development Agency (USTDA).

Liquefied Natural Gas (LNG) is a key component of a lowest cost energy scenario for the country. This USTDA grant will further develop the opportunity for LNG in the province through a feasibility study on the demand and potential impact of LNG importation at Saldanha Bay. The study will also provide a preferred model for the importation of LNG for gas-to-power electricity generation capacity and for industrial, transportation, commercial, and domestic uses. The grant will be administered through GreenCape who will select a US firm (as required by USTDA) to complete the study.

Minister Winde said: "I would like to commend the USTDA for funding this initiative. We must reduce our reliance on coal and make better decisions for our environment, and our economic future. Natural gas has the potential to play a key role in our plan to grow our alternative energy sources and this study supports the Western Cape's objective to secure a reliable and affordable energy supply. This is also why we are prioritising the growth of our oil and gas sector as part of our Project Khulisa strategy. We are also immensely proud of GreenCape for securing this vital piece of work. Their reputation as South Africa's leading energy advisory and support body is growing from strength to strength."
According to Lida Fitts, USTDA's Regional Director for Sub-Saharan Africa: "USTDA is pleased to support this project, which will help increase access to affordable, reliable energy in South Africa. At the same time, this project will create opportunities for U.S. businesses in one of South Africa's growing sectors."

Mike Mulcahy, CEO of GreenCape, added: "Natural gas has a critical complementary role to renewable energy for power generation in a lowest cost, low carbon, energy future for South Africa. GreenCape is grateful to USTDA for their support in exploring and unlocking these opportunities."

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​The pursuit of piped gas into South Africa from Mozambique could unlock South Africa’s gas economy, says investment and projectdevelopment company Fortune Capital.
Referring to the African Renaissance Project (ARP), Fortune Capital CEO Nhlanhla Magubane explains that the project is a 2 600 km cross-border terrestrial gas pipeline project, which will transport gas from the offshore and onshore basins to all Mozambique’s major cities, special economic zones and South Africa at a capital cost of $7-billion.

“The indispensable essence of this project is that it provides the potential for South Africa to have energy security, economic growth and development, as well as environmental sustainability. Currently, the project is in an exploratory phase and we are involved in project planning,” he says.
Magubane adds that Fortune Capital’s focus is mainly to ensure that the gas gets to South Africa so that it can stimulate the independent power producer (IPP) market, and the domestic and industrial markets.
“This project will be a game changer for the region, stimulating industrial growth, providing clean and affordable energy, and reducing carbon emissions.”
The prefeasibility study was finalised in February and the findings were positive and determined that the project is fundable, says Magubane. He notes that the final feasibility study started mid-year and will point the project towards the start of construction in about a year’s time.

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South Africa’s State-owned Industrial Development Corporation (IDC) has approved R218-million in loan finance to support the further development of a natural gas resource in the Free State through the creation of a 107-km pipeline network and associated gas processing facilities.
The funding, which remains subject to the fulfilment of certain conditions, will be used by Tetra4, the natural gas subsidiary of JSE-listed energy company Renergen, which is also planning to raise a further R145-million in equity finance to implement the project.

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With a fall in gas prices and a stagnant economy, gas-fired power plants may not be as attractive an option as they were a few years ago, but they will still form a vital part of South Africa’s energy mix in future, believes Siemens.
Siemens Southern and Eastern Africa CEO Sabine Dall’Omo said gas as an industry had the potential to unlock a new wave of industrial development in Africa, but it could still take some time for this to happen.
“As we went into the assessment of establishing a gas industry in South Africa, the gas price dropped significantly and all of a sudden there were new input costs we needed to consider. I think gas-to-power will definitely go ahead, although it has been delayed for now.”
Dall’Omo said that while foreign investors were seeking investment opportunities in the gas industry elsewhere in the world, it was vital to keep the momentum about gas going in South Africa and to continue to encourage investors to remain interested.  She said Siemens was not overly concerned about the delays. “We will see it through.”
“South Africa has a good setting to have renewables as a baseload. The power mix could come from coal-fired power stations, ideally modern, upgraded ones like Kusile and Medupi, and a significant chunk of renewables for the peak, and then have gas-fired power stations overlaying this as a portion of the base, with the rest available for peaking,” suggested Dall’Omo. 
Unlike nuclear and coal-fired plants, gas-fired power plants can be quickly powered up and down to meet fluctuating demand, she says.
Open-cycle gas turbine power stations can be built in less than two years and combined cycle plants in less than three years. A 600 MW gas-fired combined cycle power plant can produce its first power within 18 months.​
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Energy Minister Mmamoloko Kubayi expressed her support on Tuesday for the country’s proposed gas-to-power programme, assuring delegates to a conference in Cape Town that government intended proceeding in line with the existing “vision and policy objectives” for gas infrastructure.
“Over the past few months we have indicated our indication to launch gas infrastructure development though the Section 34 determination under the Electricity Regulation Act, in pursuit of an initial 3 700 MW of power plants,” Kubayi said in an opening address to the Gas to Power Conference.
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Her speech came amid significant uncertainty about the future of South Africa’s independent power producer (IPP) programmes, owing to Eskom’s refusal to conclude power purchase agreements (PPAs) for 37 outstanding renewable-energy projects and fresh questions about the legal standing of the Ministerial determinations providing the framework for the procurement of new generation capacity.
Kubayi made no reference to the status of the gas determination, but confirmed recently that all determinations would need to be reviewed in light of the recent ruling by the Western Cape High Court, which set aside two nuclear determinations as “unlawful and unconstitutional” on the basis that they had not been subjected to public consultation ahead of concurrence by the National Energy Regulator of South Africa (Nersa).

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Alternative energy company Renergen on Wednesday announced a 24% increase in the natural gas reserves held at subsidiary Tetra4’s Virginia project, in the Free State.
The Alt-X-listed group’s R4.8-million drilling and exploration activities uncovered total net proven and probable reserves of 100-billion cubic feet of natural gas, up from the 81-billion cubic feet reported in 2015.

Leading South African financial institution Standard Bank has confirmed that it is keen to participate in the funding of South Africa’s gas-to-power (GTP) programme and that it is eagerly awaiting the release of the project information memorandum, outlining government’s preferred procurement model.
The Department of Energy (DoE) envisages the development of 3 700 MW of new gas-fired power generation, with 3 100 MW to be developed by independent power producers (IPPs) and the 600 MW balance in a public-private partnership with State-owned companies.

​Standard Bank head of power Rentia van Tonder tells Engineering News Online that the bank, which has been a major funder of Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) projects and which is supporting participating bidders for the first coal baseload IPP bid window, is keen to participate.
That said, she expects the GTP programme to raise a number of funding considerations, with government’s IPP Office showing a preference for a “bundled” offer that integrates the infrastructure required to import gas, including a floating storage regasification unit, and the power generation projects.

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