The Petroleum Agency of South Africa has granted a new entrant in South Africa’s energy sector, Tosaco Energy, three onshore technical cooperation permits (TCPs), enabling the company to explore for and develop a potential gas resource in Mpumalanga.

Situated near existing natural gas pipeline infrastructure and power stations, the company believes it will be able to develop the 2 900 km² area for which TCPs have been granted, into a resource that will help diversify the country’s energy mix away from coal-fired power generation.

Speaking to Engineering News Online on Thursday, CEO Bradley Cerff said even though gas prices have been declining in recent years, the establishment of an indigenous onshore natural gas resource and related infrastructure will provide protection to the local industry.

“South Africa is also looking to have a minimum of 2 000 MW of energy [generated] from gas [which means there is a market],” he said.

“There is no indigenous gas that goes into the market, except for the gas that is being produced by PetroSA,” Cerff pointed out, adding that gas is a more environment-friendly option for electricity generation, with far less harmful atmospheric pollutants than coal.

One of the largest onshore gas acreages in the country, the permits are estimated to hold trillions of cubic feet of clean natural gas and would not involve hydraulic stimulation (fracking), owing to its composition.

Tosaco Energy chief geologist Bill McAloon said the gas targets were sandstone deposits in the Vryheid formation, comprising sediments deposited in deltaic, shoreline and fluvial systems.

The company will now embark on in-house desktop studies to analyse the geophysical data, which it estimates will take around a year to complete. This will be followed by a conversion to an exploration right and a two-year drilling programme on these permits to define a reserve.

“The initial exploration process will involve various geological and geophysical techniques, which are relatively low cost and have a low environmental impact – we are putting a lot of effort into our studies. If you find out later down the line that you cannot drill a borehole there, as there is some endangered fynbos [it’s pointless].

“We are committed to making sure our operations have a minimal impact on the environment and will increase economic growth. Local beneficiation [and skills training are] our top priorities,” said McAloon.

Tosaco Energy is a majority black-owned and sister company of the Tosaco Holding Company, which owns a 25% interest in Total South Africa.