Until gas can be made from shale gas in SA, it will have to be imported, Kubayi says
Gas is in an integral part of government’s energy mix but until it is produced domestically from shale gas, SA will have to rely on imported gas in the short to medium term, Energy Minister Mmamoloko Kubayi says.
In her budget vote speech in the National Assembly, Kubayi said the process of amending the Gas Act of 2004 had commenced and that the Gas Amendment Bill would be tabled in the Cabinet this year.
The amendments largely related to a licensing framework for regasification infrastructure and to mandating the energy minister to make determinations pertaining to the required infrastructure.
"In line with our regional integration strategy, we will negotiate with Mozambique regarding an energy collaboration agreement for the building of a pipeline from the Rovuma Basin into SA, among other things," the minister told MPs.
"This will not only enable us to have access to natural gas from a neighbour, but it will also improve the possibility of a relatively attractive gas pricing formula relative to sourcing gas from the international market."
However, until these plans came to fruition, liquefied natural gas (LNG) would be imported — probably for the next three to five years — from the international market, through Richards Bay. The lon-term scenario, that is between 10 and 15 years, envisaged shale gas production in the Karoo.
Kubayi said numerous municipalities were already approving the installation of rooftop photovoltaic systems that generated power into their local distribution systems.
To ensure the orderly development of this process, the Department of Energy would promulgate an embedded generation licensing framework in 2017 to address this proliferation of installations, as well as other distributed generation technologies with a proposed cap of 10MW per site.
The minister also said the department would promulgate regulations in May to confirm the deferment of the inception date of the clean fuel standard to a later date.
The standard was due to come into effect by July 1 2017, but Kubayi said the government had encountered problems with regard to the funding of this initiative.
"A new approach to facilitating the introduction of clean fuels will be outlined, and we believe that this will resolve the uncertainty regarding this initiative and its funding," Kubayi said.