Business

Coega will use gas to boost power

2019-12-25 16:45

The Coega Development Corporation – the operator of the Coega Special Economic Zone (SEZ) in Port Elizabeth – estimates to contribute 1 000 megawatts to the national grid by 2024 with its conversion of liquid gas into power.

Announcing his department’s energy budget vote for this year, Mineral Resources and Energy Minister Gwede Mantashe said the Coega SEZ had been chosen to be South Africa’s first liquefied natural gas (LNG) hub.

Furthermore, the recently gazetted Integrated Resource Plan (IRP 2019), which outlines new power generation capacity, says natural gas has the capacity to generate 3 000MW by 2030.

Responding to written questions from City Press this week, Sandisiwe Ncamane, energy project development manager for the Coega Development Corporation, said within the next few weeks the corporation would be engaging various stakeholders from both public and private sectors, inviting them to the SEZ for a tour of the proposed site and updating them on the progress so far.

“The Coega Development Corporation, together with the Eastern Cape provincial government, has put in place extensive gas market analysis and preparations to enhance Coega’s readiness for the implementation of high-impact energy programmes towards an integrated gas economy,” said Ncamane.

“The Coega SEZ is one of the most advanced in terms of preparations for the LNG hub, and it is the ideal location for the associated gas-to-power programmes. One of the critical game-changers for the corporation is the cost factor.

“The potential recovery quantities of indigenous natural gas are in the order of 20 trillion cubic feet onshore (shale gas) and 26 trillion cubic feet offshore.”

Potential investors are being lured for the construction of the physical infrastructure which will convert the liquid-form gas into power.

Gas will be shipped into the Port of Ngqura and then transported to the nearby Coega SEZ, where the conversion into power will be done. The power will, in turn, be transferred to the existing Dedisa Peaking Power Plant for distribution on the national grid.

The Coega SEZ currently operates a number of energy investment projects, including Dedisa, a R3.5 billion foreign direct investment project producing 342MW; a R310 million wind tower manufacturing plant; a R9 million laydown area; as well as a R1.2 billion renewable energy project.

“As early as 2006, the Coega Development Corporation undertook five environmental impact assessment studies supporting the gas-to-power solution.

“Furthermore, the 2015/16 feasibility studies by the department of mineral resources and energy, as well as Transnet included the LNG terminal at the Port of Ngqura, identifying several berths options for the deep-water seaport adjacent to the Coega SEZ,” said Ncamane.

She expressed joy in that Transnet had come on board and pledged support to the project and agreed to commit resources to make it a success.

“The SEZ boasts world-class infrastructure coupled with prime and serviced land available to host any gas-to-power projects, with possible spin-offs for other sectors of the economy.

“In addition, there is an already approved Coega infrastructure master plan that defines service corridors from the LNG project site to Dedisa substation, as well as good access via the N2 and ancillary road networks,” said Ncamane.

She said the recent deep-water drilling at Brulpadda, which could yield up to 1 billion barrels of gas condensate, in the southern Outeniqua basin, could potentially unlock enough fuel to supply South Africa’s refineries for almost four years.

“It has the potential to unlock a value chain of marine/maritime services located at the Coega SEZ, which could in turn trigger opportunities eastwards as well as in small harbours along the Wild Coast,” Ncamane said.

“In the broader perspective, the LNG hub at Coega is perfectly located as it opens up a gas corridor towards the east and west coasts, and is a response to the recently gazetted IRP 2019, which makes provision for an additional 1 000MW of gas-driven power by 2024.”

The Dedisa plant, says Ncamane, has environmental authorisation for a 400kV transmission line between the plant site and its substation, which reduces the cost of gas-to-power for investors quite significantly.

“The Coega Development Corporation is ready. All preparations are on track and the required infrastructure is in place. It’s like we had a gut feeling that we would be chosen to be the country’s LNG hub,” she concluded.


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January 26 2020