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South African Business 2023

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A unique guide to business and investment in South Africa. Welcome to the 11th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by a website at www. southafricanbusiness.co.za. A special feature in this journal focusses on the importance of partnerships as the way forward for the country’s growing number of Special Economic Zones. There are now SEZs in eight provinces and collaboration between the private sector and government and its agencies is proving a crucial element in pursuing the goal of industrializing the South African economy. These zones intended as catalysts for economic growth in established sectors and in stimulating new industries. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. The fact that South Africa’s law-enforcement agencies are arresting people alleged to have been involved in state capture and the Reserve Bank has started freezing assets in other matters leads the national overview because business can’t function properly without the rule of law. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com. These unique titles are supported by a monthly business e-newsletter with a circulation of over 35 000. Journal of African Business joined the Global African Network stable of publications as an annual in 2020 and is now published quarterly.

OVERVIEW Oil and gas The

OVERVIEW Oil and gas The Central Energy Fund has become a shareholder in a Free State gas project. Renergen’s Virginia Gas Project has passed several significant milestones. Credit: Renergen South Africa’s reserves of shale gas and coal-bed methane are set to be exploited and in 2022, the Department of Forestry, Fisheries and the Environment signed off on the map (see Energy Overview) of where nine strategic pipelines will go. The pipelines are consistent with planning for future gas exploration projects and coincide to some degree with planned Renewable Energy Development Zones (REDZs) but have caused some consternation among environmentalists. Air Liquide Large Industries South Africa Air is to start operating 16 air separation units (ASUs) as a result of an R8-billion purchase of a plant in Mpumalanga from Sasol. The company’s fleet now comprises 17 ASUs in Secunda, with the units having the capacity to produce 42 000 tons per day of oxygen. Sasol announced in 2021 that it was to sell a 30% stake in the Romco natural gas pipeline that links Mozambique and South Africa. As part of a global sell-off of assets to reduce debt, Sasol expects to SECTOR INSIGHT Routes for nine major pipelines have been gazetted. earn more than R5-billion from the transaction. The company will continue to be the pipeline’s operator and maintains a 20% stake in the venture. The Romco pipeline could carry far more gas in the future as there have been big finds of new gas off the coast off Mozambique which could be shipped as liquefied natural gas SOUTH AFRICAN BUSINESS 2023 56

OVERVIEW (LNG) to Maputo and continue from there to the Sasol plant at Secunda. The Liquefied Natural Gas Independent Power Producer Procurement Programme (LNG IPPPP) is part of the broader programme of the National Department of Mineral Resources and Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The total allocated to gas-to-power in the national power plan is 3 726MW, of which 3 000MW is for LNG. Three natural gas exploration permits have been awarded to Tosaco Energy for the sandstone-rich area between Amersfoort and Balfour in the western part of Mpumalanga by Petroleum Agency South Africa (PASA). Tosaco Holdings has a 25% stake in Total SA. Two methane-gas exploration rights have been granted to Highland Exploration in the Evander area. PASA regulates exploration and production activities, and acts as the custodian of the national petroleum exploration and production database. Gas is expanding What to do with redundant power stations is a question testing the best minds in the country. Eskom has decided that some of its sites can become locations for renewable energy plants, given that they are already connected to the grid. And in 2022 came news that Majuba Power Station is the site of a successful bid to drill for gas. Australian company Kinetiko Energy aims to supply Majuba’s 20MW gas generator with fuel. Majuba is one of Eskom’s many coal-fired power stations which are facing closure in the province of Mpumalanga and one of several that might be switched to gas. Kinetiko has a further two sites where it will do exploratory drilling: one near Sasol’s Secunda synthetic fuel plant and one to the south of that. A major milestone was achieved in July 2022 for the Virginia Gas Project, owned by Renergen subsidiary Tetra4. That was when “natural gas to plant” was achieved. This test allows for the system to be comprehensively tested, with the inlet line from the gas-gathering system opened to the process plant and then on to the natural gas filtration and pre-compression system. In September, commercial operations of the company’s liquified natural gas (LNG) plant began. Helium production will follow. Whereas it took nine years to find the R1.2-billion needed to fund the first phase of Virginia Project, investors are now looking very keenly at its prospects. An amount of R3.6-billion has been invested by Ivanhoe Mines ONLINE RESOURCES Council for Geoscience: www.geoscience.org.za Petroleum Agency South Africa: www.petroleumagencysa.com South African Oil and Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za to secure some offtake rights and the Central Energy Fund has purchased a 10% stake in Tetra4 for R1-billion. Sproule, a resources accreditation agency, has given an updated report on the helium and methane reserves in the Virginia gas field. The results were even more positive than previous estimates, with helium reserves up by 620% and methane reserves by 427%. The field covers 187 000ha in the region of Virginia, Theunissen and Welkom. The SpaceX rocket that launched in 2021 used 11 tons of helium to propel itself off the ground. Every computer microchip in the world is produced in the presence of helium and the world uses 85 tons of it every day. Exciting offshore gas discoveries have also been made in recent years. Total and its partners first announced success at a site called Brulpadda off the coast of Mossel Bay. The nearby Luiperd prospect in Block 11B/12B delivered more exciting news when gas condensate was also found there. The block, in the Outeniqua Basin 175km off the southern coast, covers an area of about 19 000km² in water depths of 200m-1 800m. The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous for the Western Cape and South Africa, if the find leads to drilling and commercialisation. PASA has noted the significance of international oil companies committing to exploration off South Africa’s coast. More exploration will guarantee that interest is maintained. ■ 57 SOUTH AFRICAN BUSINESS 2023

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