ExxonMobil has identified South Africa as one of its top priority markets for liquefied natural gas (LNG), with plans to develop import infrastructure and secure long-term supply agreements as the country transitions from coal-fired power to cleaner energy sources.
Shahrukh Mirza, ExxonMobil’s vice president of LNG market development and origination, revealed the company’s strategic interest in the South African market, stating that developing the necessary LNG import infrastructure will require partnerships. The U.S. oil major’s studies suggest South Africa will need between six and seven gigawatts of new gas-fired power plants as it moves away from coal-fired facilities toward cleaner forms of energy, including wind and solar power.
South Africa has been in discussions with rival LNG producer Qatar to secure gas supplies for its industry as imports from neighboring Mozambique, which currently supplies the bulk of gas via pipeline, are expected to decline. The country offered in May to purchase LNG worth billions of dollars from the United States over a 10-year period as part of proposals to secure a new trade deal. However, these efforts were complicated when U.S. President Donald Trump imposed a 30% tariff on imports from Africa’s most developed economy in August.
ExxonMobil affiliates previously signed a memorandum of understanding with Dutch firm Royal Vopak to collaborate on a feasibility study assessing the commercial and technical aspects of an LNG regasification terminal in South Africa. Vopak and partner Transnet Pipelines were selected last year by South Africa to develop and operate an LNG terminal at the Port of Richards Bay for 25 years.
Mirza emphasized that the company views this as just the beginning, expressing confidence that there will be requirements for additional infrastructure. The United States is the world’s top natural gas producer and the largest LNG exporter, with several new projects coming online that could further entrench its dominance, potentially creating a gas glut by 2030.
Sources: pgjonline.com, Reuters