A chimney flares at PetroSA's Mossgas facility in Mossel Bay. Picture: THE TIMES
A chimney flares at PetroSA's Mossgas facility in Mossel Bay. Picture: THE TIMES

Many South African politicians, economists and specialists in the energy sector are celebrating the news that a promising show of natural gas has been discovered in deep water south of Mossel Bay. It was found in an offshore prospecting area called Brulpadda, which is licensed to global energy giant Total.

The discovery, comes against the backdrop of rising fuel prices and an electricity utility in crisis, and has raised hopes that it may be a game-changer. The Conversation Africa’s Nontobeko Mtshali spoke to Robert Scholes and Rod Crompton about the significance of the find.

Is this an energy game-changer?

It’s not yet clear how big the find is. In a press release, Total said it “could be about 1-billion barrels of global resources, gas and condensate light oil”. To put that in perspective, SA’s total refinery capacity is 700,000 barrels of oil per day.

The gas is present over a relatively large, vertical distance (57m), but it’s not clear how extensive the gas-rich area is. We simply won’t know until more holes are drilled, and three-dimensional seismic surveys are completed.

Gas can be converted into liquid fuels. There are only a few gas-to-liquids refineries around the world. State-owned enterprise (SOE) PetroSA built one in Mossel Bay in 1989, which it still operates. It is the smallest refinery in the country. The Brulpadda find contains condensates — a kind of light crude oil — which only PetroSA’s Mossel Bay refinery can process.

Increasing the gas used increases the fraction of renewables that can be included in SA’s electricity mix, while still meeting a given electricity security and emissions target

This means the biggest benefit will probably be to that refinery. It has a capacity of about 40,000 barrels per day (bpd), and the Brulpadda find — given its proximity — could extend its life substantially.

How does this change the national energy strategy?

The government’s energy policy and its Gas Utilisation Master Plan agree that SA could usefully increase the amount of natural gas in the mix. It wants to diversify away from coal and imported crude oil.

Other reasons for increasing the use of gas are a bit counter-intuitive if your perception is that SA should be moving away from fossil fuels such as gas and oil and into renewable energy sources, to reduce climate change and save money.

The problem is that solar energy and wind energy — the main forms of renewable energy available to SA — are both intermittent: the energy they supply fluctuates with the sunshine and the weather.

Currently, the country fills the gaps between the variable supply and the consumer demand, which also fluctuates through the day and year, by turning on very expensive diesel-powered electricity generators. Switching them to natural gas could do this job more cheaply, more efficiently and with lower emissions, including of greenhouse gases.

So increasing the gas used increases the fraction of renewables that can be included in SA’s electricity mix, while still meeting a given electricity security and emissions target.

Will this gas be used in SA, or exported into the global market?

It’s too early for SA to be counting its chickens. It takes years to develop a gas-field to the point where it is producing gas. Many things can change in that period. The Brulpadda find is at great depth, both below the sea surface and below the sea floor. It will be challenging to develop in an area notorious for high winds and heavy seas. But the likelihood is that a modest-sized gas find on the South Coast would mostly be used in SA.

Compressing natural gas for long-distance export by sea is an expensive business. It needs major infrastructure, which SA currently doesn’t have. The country also doesn’t yet have a well-developed infrastructure for using gas, so the supply may initially be more than SA can consume.

However, since there’s a captive market nearby, Total — an international, for-profit company that will charge a market-related price for its gas — will almost certainly first try to sell it locally, rather than incur the cost of transporting it elsewhere. The most likely first candidates will be the PetroSA gas-to-liquids plant and the Gourikwa [diesel] power station near Mossel Bay.

The Mineral and Petroleum Resources Development Act (MPRDA) amendment, soon to be sent to parliament after years of wrangling, is designed to protect national interests in this regard.

• Scholes is a systems ecologist at the Global Change Institute (GCI) and Crompton an adjunct professor African Energy Leadership Centre, both at the University of the Witwatersrand.

• This article first appeared in The Conversation.