28 August 2003
The Minister of Minerals and Energy, Phumzile Mlambo-Ngcuka, together with the chairman of mining and resources company, Mvelaphanda, Tokyo Sexwale, on Wednesday launched the Ibhubezi Gas at Redisson, Seapoint in Cape Town.
The project to introduce natural gas is in keeping with the recommendations of the 1998 White Paper on Energy Policy which propose, among others, the diversification of primary energy supply sources and the development of gas as the least negative environmental impact of the fossil fuels.
The minister said the introduction of natural gas into the energy economy of the Western Cape is good news both for the region and for the country. The Ibhubezi gas field is presently the only one off the West Coast with a commercial potential of producing gas volumes.
This gas would be supplied to a gas-to-electricity project in the Western Cape and to the PetroSA manufacturing plant in Mossel Bay. The volume of gas already discovered in the Ibhubezi Gas Field is too small to guarantee a production life of 20 years needed to meet market demand.
These wells, if successful, will increase the volume of gas found to a level which will begin to match the market demands, and raise the prospect of discovering further volumes of gas.
The Minerals and Energy department said should sufficient reserves be discovered, a gas-fired electricity generating station will be established, which would supplement gas supplies to the PetroSA plant. It is hoped that this will lead to other commercial users switching to natural gas as a cheaper alternative to the current energy supplies.
The department added, however, that any future gas projects would depend on the discovery of sufficient supplies of gas reserves; sufficient and sustainable market demand, as well as the cost-effective transmission of the gas from the field to the market.
With the development of the appropriate infrastructure and the realisation of the full market potential of the gas available to South Africa, the percentage of gas in the energy balance may increase from less than two percent to seven percent, bringing with it investments and economic growth.
Sufficient interest has been expressed from the market to justify the investigation of transmission options.
The department has also developed a Gas Infrastructure Plan, which will form the basis of a strategy to develop the natural gas industry in South Africa based on the 1998 White Paper on Energy.
It is anticipated that there will be four main phases in the gas infrastructure development plan, namely:
- The first phase will involve the construction of a pipeline between South Africa and Mozambique. The 865km pipeline – from Mozambique to Secunda – will cost $549-million to build. The Lilly 1 gas pipeline from Secunda to Durban may have to be eventually upgraded or replaced.
- The second phase will be a pipeline in the Western Cape. Two options are being considered: the first is an onshore pipeline from Kudu; or an offshore pipeline from Ibhubezi to Saldanha, proceeding to Cape Town, and eventually to Mossel Bay and Port Elizabeth.
- Phase three will be a pipeline from the West Coast to Gauteng via Sishen in Northern Cape.
- The fourth phase will involve building a pipeline from Port Elizabeth to Durban via East London.Source: Department of Minerals and Energy