Is natural gas is coming to Richardsbay?

South Africa is pivoting to energy realism.

The South African government's draft integrated resource plan (IRP),has finally addressed the topic of natural gas in one of their scenarios with a total of 7.22GW envisioned (7 stages of load shedding).

This week, the government took a significant step forward by moving ahead with the establishment of an import facility at Richardsbay - the ideal location.

Transnet National Ports Authority (TNPA) has appointed the Vopak Terminal Durban & Transnet Pipelines (TPL) Consortium Venture as the preferred bidder to develop and operate a Liquefied Natural Gas (LNG) terminal at the Port of Richards Bay. The terminal is set to change the economic dynamics of the port city, the KwaZulu Natal Province and introduce an alternative source of energy as South Africa battles an energy crisis and transitions towards decarbonization.

I have previously outlined a strategy for how the South African government should approach this. Richardsbay is an ideal location, because it has all the right pull factors.

• The available grid capacity at sea level that justifies new LNG power generation.

• TotalEnergie’s $20 billion LNG investment in Mozambique that is estimated to start operation by mid-2025.

• The aluminium smelters that use LNG for industrial heat.

It's important to consider that there is already an established pipeline called Lilly, that can be readily converted into reverse flow, allowing for the transportation of natural gas to the SASOL hub at Secunda.

• Lilly can be put in duel or reverse flow, and the Secunda Hub can be expanded further into to Gauteng and later serve countries like Botswana and Zimbabwe.

• LNG can decarbonise the South African Trucking Industry with higher efficiencies that results in lower prices for delivered goods.

• The KZN demand for LNG for domestic cooking and heat will grow because the recent trends in “semigration” saw South Africans migrate to coastal areas like Ballito.

• Richards Bay's historical significance as a coal import hub positions it well to leverage transferable skills that can seamlessly complement the LNG economy. The justification for an import facility becomes apparent in light of Sasol's announcement that it won’t meet the 2030 gas output at the Secunda refinery in Mpumalanga.

Embracing LNG will be a no-regret strategy, because once it truly scales on the African continent, then rolling blackouts will soon be a thing of the past.

Integrating renewables en masse will be much simpler, because as even the most green places on earth, such as Australia’s IRP tell us, dispatchable and reliable power remains quintessential component for as long as the affordable battery storage problem isn’t going to be solved.

If the greenies aren’t happy with LNG, then perhaps they should come around and look towards flexible nuclear for a battery storage solution?