Twenty-two industrial gas users from the glass, metal, food manufacturing, mining and chemical sectors have formally launched a demand aggregator known as GasHub in a bid to develop the consolidated market required to catalyse alternative sources of supply to avert a ‘gas cliff’.

Gas flows to domestic consumers from Sasol’s Pande and Temane gasfields in Mozambique will be halted in 2028 and then supplemented by methane-rich gas produced from coal as a bridging solution for a further two years.

Thereafter, industry believes that liquefied natural gas (LNG) will need to be imported to meet demand.

The not-for-profit and open-access GasHub platform is viewed as a way for domestic industrial consumers to combine their purchasing power to negotiate competitively priced LNG and possible future regional supply from yet-to-be-developed prospects on South Africa’s West Coast, as well as Mozambican LNG.

GasHub chairperson Thomas Shaw, who is also Ardagh Glass Packaging South Africa’s chief commercial officer, argues that the formation of the platform, which also includes traders, improves the odds of successfully bridging the impending gas cliff by pooling demand to secure an urgently needed supply of gas.

Executive officer Jaco Human, who also heads the Industrial Gas Users Association–South Africa (IGUA-SA), adds that aggregation paves the way for a less fragmented, more mature, transparent and equitable gas market in South Africa.

“It is also likely to unlock opportunities in the gas-infrastructure space as the model matures over time,” he adds.

However, Human stresses that the initiative is but “one piece of the puzzle” with a partnership also required with government to jointly develop fiscal solutions needed for LNG storage and regasification infrastructure.

IGUA-SA recently published a ‘Gas Roadmap’ document that outlined the actions needed to avert the gas cliff.

The roadmap calls for establishing political sponsorship within the Office of the Presidency and the formation of a National Gas Project Team to coordinate across all government departments and industry stakeholders, as well as confirmation of the State’s LNG-demand commitments.

These commitments are expected to be underpinned by gas-to-power projects developed by independent power producers and Eskom.