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South Africa is seeking a partner to help it start trading gas this year as the country develops supply chains and generating capacity for fossil fuel.
Africa’s most industrialised nation plans to add at least 2 100 megawatts of gas-fired capacity at the Port of Ngqura, along with the construction of the Coega LNG Terminal Project.
To meet that demand, the Central Energy Fund released a request for proposal “for the appointment of a gas aggregator partner” to build its capacity to trade the fuel, the manager of South Africa’s energy assets said in documents published on its website.
Earlier plans to develop gas-fired power raised questions over how imported LNG would be priced in relation to South Africa’s rand. Recent offshore gas discoveries by TotalEnergies SE could jump start domestic supply, but will take years to develop.
“There is an acknowledgment of a lack of capacity” for the unprecedented trading of gas and an appreciation of the complexity of multi-year contracts with material risks, the CEF said in a related presentation.
The state-owned gas trading entity must start in 2022 and be fully independent in five years.
Any partner would support CEF in various aspects of trading, from assisting with a gas-price mechanism to developing currency exposure protection and hedging, it said. The closing date for proposals is March 2, according to the document. — Bloomberg
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