As the war in Ukraine rages on and fuel and food prices going up, South Africa has set its eyes on securing vast amounts of natural gas and Russia wants to be the supplier. The Central Energy Fund (CEF) released a tender last month looking for a gas-aggregator to help secure liquefied natural gas for projects that require gas-to-power for the Coega special economic zone in the Eastern Cape.
A gas aggregator is a wholesaler that imports liquified natural gas (LNG) in bulks and sells it to smaller clients. Shell, which has been expected to be the front runner in the bid has decided not to contest. SOCAR, the state-owned oil company of Azerbaijan and Gazprombank which is owned by Russia’s state-owned gas supplier Gazprom, are showing interest in becoming the supplier.
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The tender is very lucrative and the average demand for gas could be estimated at more than 200 million cubic feet a day. Multibillion rand contracts would have to be signed on an annual basis if this deal is reached. What is unusual is that CEF is focused on partnering with oil and gas industry to set up a new state-owned entity to aggregate these multibillion-rand contacts.
If the tender is given to the Russia owned company to be the supplier, it will be seen as the real reason behind South Africa’s refusal to call out Russia by condemning their invasion of Ukraine. South Africa decided to abstain in the UN General Council vote against Russia’s invasion of Ukraine. Only Brazil among the BRICS countries voted in support of the motion.
Source: Daily Maverick, Fin24, image from Fin24
