OVERVIEW Oil and gas
OVERVIEW Oil and gas Natural gas and helium are attracting investment. In announcing its new corporate strategy, integrated chemicals and energy company Sasol noted that it wanted to leverage its “core strengths”, one of which is in specialty chemicals. This is good news for the Free State, because Sasolburg in the northern part of the province is where most of Sasol’s chemicals work gets done. Sasol One and Sasol Midland comprise an integrated manufacturing facility which makes base and performance chemicals. It also produces electricity and other utilities and provide site support services for onsite manufacturers. What Sasol calls the “benefit of the scale and cost advantage” that derives from investments in commodity chemicals in South Africa and North America will allow it to scale up production. The intention is to expand the specialty chemicals portfolio. The chemical complex at Sasolburg is the economic driver of the oil and gas sector for the province. Sasol initially converted coal into liquid fuel, fuel components, wax and chemicals through Sasol’s proprietary technology processes. Since 2004, however, the Sasol One Site has been using natural gas from the gas fields in Mozambique as feedstock. Natural gas is reformed into synthesis gas to produce a variety of chemical products. During 2013, Sasol also started to produce electricity from natural gas to supplement its existing capacity and energy sourced from Eskom. Afrox operates a CO2 liquefier at Sasolburg which supplies the bottling and hospitality markets, where demand is strong. Renewable energy company Renergen owns the right to the natural gas and helium field around Virginia (which has proven reserves of 25-billion cubic feet). In 2016 an offtake agreement was signed with Linde to take helium. Afrox (a member of the Linde group) is spending R200-million on a plant to extract helium near Virginia. In the same year, another agreement was signed with Megabus (a subsidiary of Unitrans), to take “compressed natural gas”, which is cheaper than LNG. In 2018, South African Breweries trucks signed up to take LNG as well. Renergen’s natural gas subsidiary, Tetra4, has secured a R218-million loan from the Industrial Development Corporation to build a 107km pipeline network from Virginia. ONLINE RESOURCES National Energy Regulator of South Africa: www.nersa.org.za Petroleum Agency SA: www.petroleumagencysa.com South African Oil and Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za SECTOR INSIGHT The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbedmethane-gas exploration rights in KwaZulu-Natal and natural gas exploration permits in the Free State. Early surveys suggest that the Free State has 23-billion cubic feet of gas underground. Oil Afrox is extracting helium. The Natref fuel refinery is one of only four in South Africa, and the country’s only inland refinery. The refinery is a joint venture between Sasol Oil (63.6%) and Total SA (36.3%). It is a technologically advanced facility, which refines heavy crude oil into petrol, diesel, commercial propane, jet fuel and bitumen. The capacity is 92 000 barrels per day. One of the Sasol companies at Sasolburg, Sasol New Energy, is moving the group away from reliance on fossil fuels. An energy-from-methane power plant now running at the Beatrix Gold mine neatly encapsulates a shift from the old economy to the new. Although the Sibanyeowned gold mine still has significant reserves of the mineral, it is the shift to this new technology that is sparking interest and showing the way to creative energy solutions. FREE STATE BUSINESS 2019 38
