Mossel Bay - National oil company PetroSA plans to issue an international tender next month for liquefied natural gas (LNG) imports that are expected eventually to reach 1.2 million tonnes a year, the company said on Thursday.
"We see first gas realistically being imported by the first quarter of 2018," Carlo Matthysen, the firm's LNG project manager told journalists at its gas-to-liquid refinery in Mossel Bay on South Africa's south coast.
The company will spend between $375m and $510m to build the necessary LNG import infrastructure, including a breakwater and berth that allows for a permanently moored floating storage and re-gassification unit.
The world's second largest gas-to-liquid refinery, Mossel Bay has been operating at half of its capacity of 42 000 barrels per day due to a shortage of gas as offshore fields run dry.
"We believe come 2018 the global market will have changed, with over-supply and under-demand for LNG and we will be able to put together an attractive case as a new supply destination," Matthysen said.
The new project, which would be Africa's first for LNG importing facilities, comes at a time when South Africa is cutting its dependence on coal-fired power plants to reduce harmful greenhouse gas emissions.
The Department of Energy sees gas as a key source of new electricity, with at least 2.4 gigawatts or 6% of new capacity expected from gas-fired power plants.
PetroSA has signed a development deal with power utility Eskom for the importation of LNG, and would also consider other independent power producers to help share costs three years after ending exclusive talks over LNG supply with French energy group GDF Suez.
PetroSA expects to start producing gas feedstock from its $1bn offshore Ikhwezi gas project later this year which would help sustain the Mossel Bay refinery to 2020.
(Reporting by Wendell Roelf; Writing by Olivia Kumwenda; Editing by Jon Herskovitz and Elaine Hardcastle)
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