​Pan-African liquefied natural gas (LNG) supply network DNG Energy has received a shipment of LNG at its plant in Germiston, enabling the company to accelerate its pilot projects with its partners in the next few weeks.

DNG Energy’s pilot projects aim to test the feasibility of using LNG as an alternative to diesel, as a proof-of-concept for a cleaner and more affordable option for transport, industrial power generation and mining.
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The LNG shipment follows the recent arrival of South Africa’s first LNG shipment from Rotterdam, in the Netherlands.

DNG Energy’s LNG shipment is the culmination of seven years of planning, permitting and licensing efforts – the start of an investment programme of about R5-billion over the next several years to ensure bulk affordable and reliable LNG supply in South Africa.

Speaking at a ribbon-cutting ceremony at the plant, DNG Energy group CEO Aldworth Mbalati said several years, large investments and preparations of infrastructure have culminated in the LNG shipment and a “new dawn” for South Africa’s energy market.

“We are especially proud that it is a private, 100% black African-owned business that is enabling a future where energy is cleaner and more cost-effective than ever.”

He added that DNG Energy was focusing on transforming South Africa’s energy landscape through the advancement of LNG, which has a key role to play in increasing industrial output and power supply, while reducing greenhouse-gas emissions.

“By driving competition in the energy market, our LNG offering has the potential to boost local manufacturing and drive economic growth through the transfer of skills and creation of employment,” said Mbalati.

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When talking about climate change, not all fossil fuels are created equal. Burning natural gas, for instance, produces nearly half as much carbon dioxide per unit of energy compared with coal. Natural gas is thus considered by many to be a “bridge fuel” that can help nations lower carbon emissions while they transition more slowly from fossil fuels to renewable, carbon-neutral forms of energy. The recent boom in natural gas production in the United States, for instance, contributed to a 3.8 percent drop in carbon emissions in 2012.

But natural gas has a climate downside—it’s mostly composed of methane. “Methane is a potent greenhouse gas,” said energy researcher Adam Brandt of Stanford University. The gas is about 30 times better at holding in the atmosphere’s heat compared with carbon dioxide. So if enough methane leaks during production, natural gas’s slim advantage over other fuels could be wiped out.
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A report published today in Science, however, concludes that the United States’ leaky natural gas production system currently isn’t leaking enough methane to make it worse fuel for the climate than coal.

The natural gas production system is not sealed tight. There are some areas where methane is allowed to leak intentionally for purposes of safety, but there’s also a lot of leaky valves and cracked pipes out there that can let the gas out. Quantifying all those leaks, though, has proven tricky.

The Environmental Protection Agency provides estimates of methane emitted in the United States. To calculate these estimates, someone has to go to a facility and take direct measurements from various equipment and devices. Those measurements are added up to get a total for the facility. And the facilities where the measurements are taken will serve as the basis for calculations of methane emissions for a type of source or a region.

These official estimates, however, probably underestimate total methane leaked because the devices that are sampled to provide those estimates aren't necessarily representative of all of the devices used by the natural gas industry to produce and move its product. In addition, sampling is expensive and limited. It also only takes place at locations where facilities let the EPA in—those facilities may be different from the average facility, leading to sampling bias.
Studies that have directly measured methane levels have gotten much different results. Atmospheric tests that have covered the entire United States come up with methane emissions that are about 50 percent higher than the EPA estimates, according the new paper in Science. Partly that’s because air sampling will pick up both anthropogenic methane and methane from natural sources, such as wetlands. But it’s also because the EPA’s methods are so inaccurate—natural sources only account for a fraction of the discrepancy.

The air sampling studies, though, have found some odd peaks in regional methane emissions, causing scientists to worry that there could be a lot more methane leaking from sites of natural gas production than thought. So Brandt and his colleagues began tallying up all the places where natural gas production could be leaking methane along with other sources of methane that could be mistaken for natural gas emissions.

The large natural gas leaks suggested in regional studies “are unlikely to be representative of the entire [natural gas] industry,” they write. If there were natural gas leaks of that magnitude across the natural gas industry, then methane levels in the atmosphere would be much higher that surveyed in the air sampling studies. “Most devices do not leak,” Brandt noted. Only about 1 to 2 percent of the devices used in natural gas production leak any methane, and large emitters—what the researchers nickname “superemitters”—are even rarer.

Brandt and his team then took a look at all the excess methane being released into the atmosphere. For their calculations, they assumed all that methane was coming from the natural gas industry. That’s unlikely, they note, but it makes for a good worst-case scenario. But even that level of methane wasn’t enough to make natural gas a bigger greenhouse gas contributor than coal, the researchers found. And switching from coal to natural gas for energy production does reduce the total greenhouse effect on a scale of 100 years, the standard scientists use in calculations like these.

“We believe the leakage rates are likely higher than official estimates, but they are unlikely to be high enough to disfavor shifting from coal to natural gas,” Brandt said.

Natural gas has also been promoted as a cleaner fuel than diesel, and it’s replaced that fuel in many trucks and buses on city streets. But the climate benefits of such a switch are not as clear as the switch from coal to natural gas.

Taking into account methane leaks from extraction all the way down the pipeline to the pump may actually make natural gas less climate friendly than diesel. But it’s probably not time to abandon the natural gas bus. “There’s all sorts of reasons we might want to [replace] diesel buses,” Brandt says. For example, burning natural gas results in less air pollution and less reliance on imported petroleum.

For natural gas to assert itself as a more environmentally friendly fuel, though, the industry is going to have to plug up its leaky system. Companies may find it worth their while to do so, and not simply for the climate benefits. Less leakage equals more profit, and plugging just a few of the biggest leaks could easily increase income, Brandt says. “If we can develop ways to quickly and cheaply find these sources, it’s going to be very profitable for companies.”

Sarah Zielinski is an award-winning science writer and editor. She is a contributing writer in science for Smithsonian.com and blogs at Wild Things, which appears on Science News.

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Gas will be needed to close help meet energy demand in South Africa during the necessary transition to clean energy,  speakers from the energy sector, academics, financial institutions and South African government departments said during a webinar on October 27.

They noted, however, that South Africa has not yet put in place the required policies and regulations, trade agreements and infrastructure needed for a just transition.

During a virtual seminar under the theme 'Opportunities in the Transitioning South African Energy Sector', hosted by energy technology multinational Siemens Energy, speakers spoke about the role of gas in the transition and then focused on the early-stage green hydrogen economy, which requires a diverse range of supporting policies, infrastructure, skilled people and small and large businesses to realise the potential developmental impact that the transition presents.

"Gas is useful to facilitate the energy transition in South Africa. Natural gas will play a role in the transition as we move to carbon-free energy systems. Gas-fired power will have huge social and governance impacts in terms of ensuring energy security, while reducing the carbon footprint of electricity compared with coal- and oil-fired power plants," said Siemens Energy Southern and Eastern Africa MD Thabo Molekoa.

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"Gas-fired and combined-cycle power plants can balance the supply from renewable energy sources and stabilise grids. This makes gas a key technology in decarbonisation, as it is flexible and complementary to the development of clean energy. To successfully transition the economy, security of supply is as important as expanding renewable energy," he said.

Gas will be necessary to bridge the gap in supply as other technologies and their markets mature, and demand for gas will triple to 2035 when it is expected to plateau, concurred Wits Business School head Maurice Radebe.

He added that the gas finds in Mozambique were of international significance and said South Africa urgently needs to collaborate and cooperate with Mozambique, as well as prepare its infrastructure, ports, industries and economy to get gas to its economic heartlands.

"However, South Africa has not added one megawatt of energy from gas, despite being in the midst of load-shedding that harms small businesses and the economy. Current gas demand of about 173 petajoules a year far exceeds supply. This requires urgent focus through the development of a specific South African energy plan separate from the Integrated Resource Plan (IRP 2019)," he said.

The IRP 2019 makes provision for 3 GW of gas, which had been reduced from the 8 GW in the draft IRP of 2018, owing mainly to practical constraints, including suitable infrastructure, said Department of Mineral Resources and Energy (DMRE) Programmes and Projects deputy director-general Jacob Mbele.

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State-owned energy companies from South Africa and Mozambique have exercised their rights to buy the 30% stake in the Rompco natural gas pipeline that Sasol is selling, the companies said.

Petrochemical firm Sasol said last month it was selling the stake in the Rompco pipeline from Mozambique to South Africa to a consortium of investors including Reatile Group for an initial amount of R4.15bn.

But that deal was subject to pre-emptive rights on the shares held by existing shareholders iGas, a subsidiary of South Africa’s Central Energy Fund, and Companhia Moçambicana de Gasoduto (CMG), a subsidiary of Mozambique’s Empresa Nacional de Hidrocarbonetos.

iGas and CMG will now increase their stakes in Rompco to 40% each from their current level of 25%. Sasol, which is trying to shed assets to pay off debt, will reduce its shareholding from 50% to 20%.

The transaction will be fully funded from past and future dividends generated by the 865-kilometre pipeline, the Central Energy Fund and Empresa Nacional de Hidrocarbonetos (ENH) said in a joint statement.

“Having both governments as majority shareholders of the cross-border pipeline is strategic, since the pipeline is the single source of gas to the South African market,” ENH chief executive Estêvão Pale said.

Sasol said in a statement: “We can confirm that Sasol has received pre-emptive rights notices and will now review the notices. We believe that the successful partners will add significant value to this important regional energy asset.”

THE PORT of Richards Bay has been identified as one of three ports to support Transnet’s natural gas strategy, which seeks to provide storage and import facilities for South Africa’s growing natural gas sector.

In the short-to-medium term, the port will support the liquefied natural gas (LNG) power generation facilities and in the longer-term, LNG import facilities.

Portia Derby, the chief executive of state-owned rail, port and pipeline company Transnet, led a stakeholder engagement session on Friday where she shared the plan for the port of Richards Bay with the local government, business community and traditional leadership within Umhlathuze and the surrounding areas.

The port of Richards Bay, which lies 160km north of the port of Durban and 46km south of the port of Maputo in Mozambique, is a strategic industrial port, responsible for exporting commodities such as coal, chrome and magnetite.

Transnet said it planned to relocate its liquid bulk operations from the Port of Durban to the Port of Richards Bay to support the former’s transformation into a regional water container hub port.

Ayanda Shezi, Transnet’s spokesperson, said, “The port of Richards Bay is already well-equipped and located to take advantage of the migrated volumes. Liquid bulk lease sites and berths have already been identified in the South Dune precinct in the port for the relocation of the liquid bulk terminal.”

For coal exports, Richards Bay remained the primary coal export channel in South Africa. Transnet also said it aimed to maintain export coal targets as it worked to realise its carbon neutral targets over time.

Transnet planned to increase capacity for the handling of chrome ore and magnetite in the Port of Richards Bay as it remained the primary port of export for these commodities and was complemented by the port of Maputo as a secondary export channel.

Transnet said it would continue to engage with stakeholders for the growth and development of Richards Bay and its local communities.

In addition to normal port activities and operations, the port has a key role in the economy of the uMhlathuze Municipality, embracing the towns of Empangeni and Richards Bay, with its growing industrial base.

The port enjoys a strategic relationship with the Richards Bay Industrial Development Zone, which is situated in close proximity to the port, a prime industrial business and trade hub, attracting export-orientated investors as one of the leading Special Economic Zones.

Regarding LNG initiatives, Department of Mineral Resources and Energy Minister Gwede Mantshe said in his recent budget vote they were committed to developing the gas industry into the local economy. Mantashe said an environmental impact assessment study had been done for three gas-to-power plants of 1000 megawatts each to enable gas to power projects in Special Economic Zones.
The request for proposals would be issued in the third quarter of the 2021/22 financial year. An estimated total capital investment for 15 projects currently under construction, as licensed by the National Energy Regulator of South Africa, is R8.9 billion. From these projects, at least four of them with a value of R6.3 billion were expected to be completed by the end of this year.

Developments of regional gas-fields would lead to natural gas becoming a more important fuel in South Africa. Due to the availability of natural gas in neighbouring countries, such as Mozambique and Namibia, and the discovery of offshore gas reserves in South Africa, this was likely to lead to the gas industry in South Africa undergoing rapid expansion.

In addition to coal, gas and LPG, South Africa produces about 930 000 tons of natural gas and 104 860 tons of associated condensate.

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Tlou Energy is focused on delivering Gas-to-Power solutions in Botswana and southern Africa to alleviate some of the chronic power shortage in the region.  Tlou is developing projects using coal bed methane (CBM) natural gas. 
​Botswana has a significant energy shortage and generally relies on imported power and diesel generation to fulfil its power requirements.  As 100% owner of the most advanced gas project in the country, the Lesedi CBM Project, Tlou Energy provides investors with access to a compelling opportunity using domestic gas to produce power and displace expensive diesel and imported electricity.
The Company is listed on the Australian Securities Exchange, London’s AIM market and the Botswana Stock Exchange and is led by an experienced Board, management and advisory team including individuals with successful track records in the CBM industry.

Since establishment, the Company has significantly de-risked the project in consideration of its goal to become a significant gas-to-power producer.  The Company flared its first gas in 2014 and has a 100% interest over its Mining Licence and ten Prospecting Licences covering an area of ~9,300 Km2 in total.  The Lesedi and Mamba Projects already benefit from significant independently certified 2P gas Reserves of ~41 BCF.  In addition, 3P gas Reserves of ~427 BCF and Contingent Gas Resources of ~3,043 BCF provide significant additional potential.

The Company is planning an initial scalable gas-to-power project.  Following successful implementation of this first scalable project, the Company looks forward to evaluating longer-term prospects for the delivery of electricity generated from CBM in Botswana to neighbouring countries.

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A black-empowered consortium that includes companies with extensive gas-to-power experience has made a formal submission to the Department of Mineral Resources and Energy (DMRE) in which plans for power generation plants capable of adding between 300 MW and 3 300 MW to South Africa’s grid within 12 to 36 months are outlined.

The offer has been made in response to a request for information (RFI) released by the DMRE in December in an effort to inform an upcoming ‘Risk Mitigation Power Purchase Programme’, which will seek to address an immediate supply deficit of 3 000 MW with solutions that can be “grid connected in the shortest time at the least possible cost”.

The closing date for the RFI was January 31 and the DMRE has given itself a month to evaluate the proposals and design a procurement process.

Engineering News has not yet been able to confirm the number of submissions made ahead of the RFI deadline, nor what solutions have been proposed. It is understood, however, that the DMRE received a strong response, with hundreds of potential bidders having descended on the Centurion headquarters of the Independent Power Producer Office at the end of January to hand-deliver their proposals.

​One of the responses seen by Engineering News is an offer made by a consortium named Mhlathuze Energy, which derives it identity from the Zulu name for the river that meanders through Richards Bay, in KwaZulu-Natal – the proposed location for its project.

The consortium includes black economic empowerment company Phinda Power (a member of the Newlyn Group), Japanese multinational Marubeni and liquefied natural gas and gas-to-power specialist Golar Power.

Mhlathuze Energy’s proposal provides for the rapid deployment in Richards Bay of 300 MW (up to a maximum of 1 200 MW) of emergency power generation capacity that could be operational within 12 months of financial close.

The solution would involve the deployment of General Electric- (GE-) supplied mobile aeroderivative gas turbines. The solution would require the importation of liquefied natural gas (LNG) supplied through a floating storage regasification unit (FSRU) and the construction of the LNG marine import infrastructure.

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​In June 2017 Italian oil and gas company ENI committed to investing $10-billion on the building of Coral South, a floating liquified natural gas (FLNG) project off the Rovuma basin in Mozambique, the world’s first ultra-deep-water FLNG facility. 8

In June 2019, Mozambique LNG (led by US-based Anadarko) committed $20-billion on the development of integrated offshore and onshore gas fields, through LNG, in the Rovuma basin, east of Palma, and in December 2019, Rovuma LNG (led by ExxonMobil and ENI) is expected to commit $30-billion to develop the same.

Each of these projects marked the largest investment of its kind in Africa, only to be overtaken by the next. The chance for Mozambique to grow its $14-billion economy and repay its government debt, now sitting at 100% of GDP, is a once-in-a-lifetime opportunity.

Standard Bank, which is heavily involved in Mozambique’s gas sector, says the Rovuma LNG project alone has the capacity to boost GDP by between $15-billion and $18-billion per annum and contribute $5-billion annually to the fiscus and create 323,000 employment opportunities – with LNG as a whole potentially facilitating real GDP growth of 8% to 10% over the next 30 years.

While it is not yet clear to what extent South Africa will benefit from a new source of LNG – prices will have to be negotiated on competitive terms – local companies can benefit from the sheer volume of work underway in the northern neighbour.

“A $128-billion capex spend over a decade is a major opportunity for SA business to physically supply the projects (and associated investments),” says Paul Eardley-Taylor, southern Africa head of oil & gas at Standard Bank.

“SA could export goods and services to Mozambique, investors could form companies in partnership with Mozambique nationals,” he says.

There will also be opportunities for SA human capital working on the LNG projects and other domestic gas investments as employees, contractors, manufacturers, service providers and consultants.

Standard Bank has committed to finance part of the Anadarko project (which has been acquired by French petrochemical giant Total) and also plans to finance part of the ExxonMobil project due to be announced later in 2019.

This could then see South Africa’s Export Credit Insurance Corporation, a dti subsidiary, underwriting part of this investment, Eardley-Taylor says.

“This could secure market access for SA companies of over $500-million. And the same could apply if SA companies are involved in Rovuma LNG.”

At a recent Mozvest conference held in Cape Town, speakers noted the limitations of Mozambique’s infrastructure to handle projects of this nature.

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​The acting head of the Independent Power Producer Office (IPPO), Advocate Sandra Coetzee, says “time is of the essence” for finalising South Africa’s gas-to-power (GTP) plans in light of the prospect of possible electricity supply shortages arising from the underperformance of Eskom’s coal fleet.

Coetzee, who was appointed in July, says gas will definitely play a role in South Africa’s transitioning electricity system, as it offers the flexibility required to complement variable renewable energy plants. In addition, GTP plants can be built relatively quickly and have lower emissions than coal-fired stations.
Speaking at a seminar hosted by Nedbank and EE Publishers, she acknowledged that gaps remained in South Africa’s gas policy framework and indicated that Eskom’s weak financial position also posed procurement challenges, with the utility remaining the single buyer of power produced by independent power producers (IPPs).

In addition, South Africa did not have sufficient domestic gas resources to supply GTP plants, as well as existing and future industrial users, and had yet to build the infrastructure needed for the import and processing of liquified natural gas (LNG).

However, the imminent promulgation of the updated Integrated Resource Plan (IRP), together with the fact that a ministerial determination was already in place for the procurement of over 3 000 MW of GTP capacity by 2030, meant that South Africa was not entirely constrained by the absence of a coherent framework.

The draft IRP envisages the first 1 000 MW of GTP capacity being introduced into the South African grid by 2024, with a further 2 000 MW to be added by 2027.

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