Mossel Bay likely to run out of gas

South Africa’s flagship gas-toliquids (GTL) refinery at Mossel Bay could run out of natural gas within two years when offshore reserves dry up, a senior energy official said.

The Mossel Bay GTL plant, one of the world’s largest, is operated by state-owned national oil and gas company PetroSA, a subsidiary of the government’s Central Energy Fund.

“We are in a position where between 2020 and 2022 we might not have any gas available,” said Luvo Makasi, chairman of the fund’s board.

He said the fund was looking to source feedstock elsewhere but did not provide details after PetroSA failed to secure additional gas reserves in a $1-billion offshore drilling campaign.

The drilling campaign, which was discontinued after poor results, was stopped after it found only 25 billion cubic feet (bcf) of gas that could be commercially extracted compared with the 242 bcf of gas expected.

The Mossel Bay plant, located on the south coast, accounts for around 6% of South Africa’s refining capacity but is operating at less than half its capacity of 45 000 barrels per day of oil, equivalent due to dwindling reserves.

Besides the financial hit PetroSA took from its drilling campaign, Makasi said it also faced a massive decommissioning bill which could threaten its financial stability.

“That liability is estimated to be about R9.6 billion,” he said.

Between 2020 and 2022 we might not have any natural gas available Luvo Makasi Central Energy Fund chair