Gas find gives PetroSA ‘new lease’
Total’s discovery provides a lifeline for the struggling state company as its reserves dwindle
Total’s significant gas find in the Outeniqua basin off SA’s south coast could be a lifeline for PetroSA, which is running out of reserves and faces an uncertain future.
Total’s significant gas find in the Outeniqua basin off SA’s south coast could be a lifeline for PetroSA, which is running out of reserves and faces an uncertain future.
The discovery of about a vertical distance of 57m of gas condensate could ensure the national oil company’s commercial sustainability for the next 50 years, according to Bongani Sayidini, PetroSA acting CEO.
“This has given us a new lease on life. It’s been discovered on our doorstep with all the existing infrastructure belonging to us,” he said. The state-owned enterprise (SOEs) has been plagued by maladministration and corruption and just this week, the auditor-general told parliament its ability to continue operating in future is in doubt.
But the find by the French multinational at its Brulpadda prospect, announced last week, could also benefit PetroSA, which has a gas-producing block nearby.
“If Total wanted to monetise or beneficiate that find locally, we have existing infrastructure not far from Brulpadda, which is about 75km from the nearest tie-in plant,” said Sayidini. “That infrastructure could enable a quicker development of the Total discovery.”
PetroSA has been producing gas from its south coast Block 9, since 1992, which is fed into its Mossgas gas-to-liquids refinery that employs 2,000 people. But as PetroSA’s reserves dwindle, Mossgas is consuming feedstock at below 50% of its design capacity. The plant is intended to use nearly 6m³ of gas per day but is currently being fed with less than half that, said Sayidini. If the plant can be run at full capacity it will make PetroSA commercially sustainable.
Mossgas, the first gas-toliquids plant in the world, was built by the apartheid government, which had grown paranoid about energy security during sanctions. But there was never enough gas to justify it, said Stephen Larkin, an expert in Southern Africa oil and gas exploration and CEO of Africa New Energies.
“You should never build any energy infrastructure unless you have feedstock guaranteed.”
PetroSA has been looking at other options of potential feedstock, such as gas imports or the logistics of bringing gas from Mozambique, but the Brulpadda discovery could be the solution.
“It absolutely makes sense,” said Larkin. “It could be a winwin situation. Total could radically reduce its capital expenditure requirement.”
Another benefit to consider is that some gas left in its Sable and Oribi fields on the south coast would become stranded if Mossgas is shut down. With the Brulpadda resource, this gas would remain economically viable, Larkin said.
Some of the gas could also be used at Eskom’s Gourikwa peaker plant near Mossel Bay, which consumes costly diesel but could be converted to use gas. This could supply 746MW, or 1.5%, of SA’s power at a fraction of the cost, Larkin said.
PetroSA has been working closely with Total and has supported it through access to its logistics base in Mossel Bay, Sayidini said. Although it’s still early days, he said PetroSA had reached out to Total. “They are aware of our need for gas and our interest in their discovery.”
In an interview with Business Day earlier this week, the GM for Total Exploration & Production SA Adewale Fayemi said it was too early to say where the gas would go and what it would be used for until the full extent of the resource was determined through further drilling.