The National Energy Regulator of SA (Nersa) is confident its pricing methodology for natural gas, which was upheld after a high court challenge, will encourage investment in SA’s new gas infrastructure, regulator Nomfundo Maseti says. At present Sasol, which has invested in a pipeline and developed gas fields in southern Mozambique, is the only seller of natural gas in SA. The Department of Energy has issued a detailed information memorandum to launch SA’s first gas-to-power programme, starting with power plants based on imported liquefied natural gas (LNG) at Coega and Richards Bay. The winning bidders also have to provide distribution hubs for third-party offtake. Maseti said Nersa had two pricing methodologies for natural gas: the basket price (which was challenged) and a cost pass-through method. Cost pass-through pricing would allow LNG importers to recover their investment. There is no standard LNG price as there is for crude oil. Importers from the US use Henry Hub prices whi...
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