South Africa has been too slow to act on the impending gas cliff and the only way for the country to navigate this challenge now is through liquefied natural gas (LNG) imports, global oil and gas consultant Ebbie Hann has said.

“I like that there is hope about finding [gas], but if you haven't found it yet, you're too late. We haven't found it yet in this wonderful country – not in economic quantities. That doesn't mean you should stop looking for it. But if you focus your hope on finding gas and meeting the gas cliff in that way, you're too late,” he told energy industry stakeholders as part of an expert panel at the Natural Gas Symposium, in Johannesburg, on May 7.

While Hann commended the hopeful sentiment that had been driving plans and conversations around domestic gas economy development, he was highly critical of the abundance of “talk” and the lack of “action”.

“We all need to have hope, but hope is not a strategy. A strategy needs tangible action plans and a commitment of all parties involved. We all recognise what's going on in South Africa, and many people need to come to the party. There's always somebody else who needs to fix it, not us.

“We talk about win, win. But who is willing to sacrifice what? All investors want to make money. All governments want to make money via taxes. All consumers want to save money by having reliable and cheap energy, and it creates a power vacuum in which nobody moves forward,” he said.

However, Hann was strongly countered by Petroleum Agency of South Africa (Pasa) acting CEO Dr Bongani Sayidini, who insisted that Hann’s claims were inaccurate, and that there were indeed ample domestic gas discoveries, highlighting the onshore prospects in the Free State and Mpumalanga, as well as offshore finds such as Brulpadda and Luiperd – located in Block 11B/12B of South Africa’s Outeniqua basin.

“The Brulpadda and Luiperd discoveries sit some 175 km from a gas-to-liquids refinery that actually ran out of gas in late 2020. So that gas is sitting close to a potential income market in the form of that refinery. That refinery sits adjacent to the [Gourikwa] power plant, which is currently run on diesel. That could easily be converted to run on gas. So I do not understand it when you say we have not found gas in this country. We have,” Sayidini said.

TotalEnergies spent about $400-million developing the Brulpadda and Luiperd prospects but pulled out in July last year, citing difficulty in economically developing and monetising the gas discoveries for the South African market.

Regulatory uncertainties and infrastructure challenges in South Africa also played a role in the decision. The failure to secure a gas purchase agreement with State-owned oil company PetroSA further complicated the project's prospects.

TotalEnergies indicated a strategic shift in focus towards other exploration areas, including the Orange basin near Namibia, where the company sees more promising opportunities.

The Brulpadda and Luiperd prospects are now under the stewardship of Main Street 1549, a subsidiary of the Canadian firm Africa Energy Corp, which has expressed confidence in the commercial viability of the discoveries.

The company is now actively pursuing environmental authorisations for survey activities in Blocks 11B/12B and adjacent Block 9, aiming to gather essential data for the design and layout of subsea production facilities and associated infrastructure.

Despite Sayidini’s insistence that it was possible for these gas discoveries to be turned into producing wells within five years, the general consensus from the rest of the panel was that a minimum of 10 to 15 years was more realistic, assuming additional delays do not derail development further.

Sayidini believed that, although South Africa was on a trajectory to hit the ‘gas cliff’ as soon as 2028, imported LNG was too costly an alternative.

“LNG is the most expensive form of gas in this country. The gas that's been found off the south coast could be deemed to be a little bit pricey by virtue of the environment there . . . but still that gas is very cheap relative to the LNG that you want to import,” he said.

The National Gas Symposium was hosted by Wits Business School, in partnership with the Industrial Gas Users Association of Southern Africa and Mail & Guardian.