In an interview with John Perlman on radio 702, Susan Comrie explains the SA gas tender following a story published by amaBhungane.
On the 28th of March, amaBhungane reported that Gazprombank, part-owned by Russia’s state-owned gas supplier has confirmed that they are considering bidding for what is potentially a multi-billion-rand contract to provide gas to South Africa.
Listen to the full interview here
The Central Energy Fund (CEF) released a tender last month, looking for a gas aggregator to help secure liquified natural gas (LNG) for various gas-to-power projects planned for the Coega special economic zone in the Eastern Cape.
A gas aggregator is a wholesaler who imports LNG in bulk and sells it to smaller customers.
The tender is potentially lucrative: “[T]he average Gas Demand could be more than [200 million cubic feet per day]. Such volumes can be managed through multi-billion rand contracts per annum,” the tender documents explain.
This translates to over 75-million MMBTU per year, the common unit of measure for natural gas when it is sold on the global market.
Before the Russian invasion of Ukraine, 1MMBTU was priced at roughly $26. At the beginning of March, 1MMBTU hit a record-high of $52. Even at pre-Ukraine prices, that would put the size of the potential contract at $2-billion (R29-billion) a year.