Background

Renewable energy and nuclear power are the world's fastest-growing energy sources, each increasing by 2,5% year. However, fossil fuels are predicted to continue supplying almost 80% of world energy use through 2040. Natural Gas is the fastest-growing fossil fuel, with global consumption increasing by 1.7 percent per year. Increasing supplies of shale gas and coal-bed methane, from which Natural Gas can be extracted, will support growth in projected worldwide Natural Gas use.

Natural Gas reserves are concentrated, with 50% of the reserves found in three countries: Russia, Iran and Qatar. In South Africa, piped Natural Gas comes from Mozambique.

Mozambique’s offshore fields are considered to hold enough gas to meet global demand for more than two years. The fuel will feed Liquefied Natural Gas (LNG) export plants, of which Mozambique plans to build four by 2018. This will make it the world’s largest LNG export site after Qatar.

At the moment, the majority of Mozambique’s Natural Gas is exported to South Africa.

Mozambique’s neighbour, Tanzania, can also boast abundant proven Natural Gas reserves. Estimates from two of the five exploration blocks in Cabo Delgado Province, where Mozambique meets Tanzania, indicate that the country possesses well over 100 trillion cubic feet (tcf) of Natural Gas. Recent offshore discoveries have revealed 17-20 tcf of Natural Gas, which equates to 3.06-3.6 billion barrels of oil.

These findings have significantly boosted Tanzania’s potential to become a major Natural Gas exporter.

Sasol Gas is the only supplier of Natural Gas in South Africa, with rights to produce gas from the Mozambican gas fields. It owns the transmission and distribution pipeline that supplies the South African market, making it the dominant provider of gas transmission and the sole provider of gas distribution services.

The National Energy Regulator (Nersa) favours a competitive market for gas and gas services in South Africa. While Sasol Gas owns the only transport and distribution licence, Nersa has granted licences to four independent Natural Gas traders to open the market.

Virtual Gas Network (Pty) Limited and NGV Gas (Pty) Limited, subsidiaries of CNG Holdings, are two of the gas traders approved by Nersa as alternatives to Sasol Gas. They have a substantial guaranteed gas supply from gas allocations on the Sasol pipeline via Egoli. They are also the only gas traders currently distributing gas via road to large industrial customers and have expertise to transport Compressed Natural Gas to those customers not on the rigid gas pipeline.

As Natural Gas will become an important energy source in the future, the CNG Group is actively securing further contracted supplies, whether through traditional sources, coal-bed methane or shale gas, to ensure consistent supply.