Africa (Commonwealth Union) _ Eskom and Sasol have signed a memorandum of understanding (MoU) to collaborate on exploring liquefied natural gas (LNG) supply opportunities for South Africa. The partnership aims to address the country’s growing need for gas-to-power generation as part of its energy transition.
Eskom’s CEO, Dan Marokane, explained that the utility will serve as a key off-taker for imported LNG, supporting its plans to diversify energy sources by incorporating gas into its electricity production. By pooling Eskom’s gas demand with that of other industrial users, the companies hope to negotiate favourable supply contracts with major LNG-exporting countries like Qatar.
The partnership will also explore the necessary infrastructure and market potential for establishing a sustainable LNG import system in South Africa, with government-to-government relations playing a crucial role. This initiative will provide a stable gas supply for power generation and support the country’s decarbonization efforts.
South Africa is facing a potential gas supply crisis by mid-2027, when Sasol’s current contract to supply natural gas from Mozambique will expire. Although Sasol is working to extend the supply from Mozambique’s Pande and Temane gas fields until 2028, further extensions are unlikely.
To ensure continued gas availability, Sasol and other industrial users are considering LNG import opportunities via Mozambique’s Matola port, which could link to the existing Rompco pipeline. The Industrial Gas Users Association of Southern Africa (IGUA SA), representing key industries like Illovo and Mondi, is also exploring solutions to consolidate gas demand and secure long-term supply.
Jaco Human, IGUA SA’s executive director, welcomed the collaboration but stressed the need for concrete project developments within the next nine months to prevent a gas shortage by 2028. The gas industry believes that importing LNG through Mozambique offers the most viable solution.
Minister of Electricity and Energy, Kgosientsho Ramokgopa, reaffirmed the government’s commitment to supporting LNG solutions for South Africa. Talks with Qatar about a potential LNG supply agreement have already taken place, marking a critical step in addressing the country’s future energy needs.
