South Africa's Gas Supply Cliff Looms Large in 2028

South Africa's economy is facing a significant threat due to an expected gas shortage in 2028. The country relies heavily on natural gas imports from Mozambique, which has been its primary source for over two decades. However, production from the Pande and Temane fields will decline after 2028, leaving South Africa with a substantial gap in gas supply.

The impact of this shortage will not only affect energy security but also industrial policy, food security, and manufacturing competitiveness. Approximately 35-40% of the gas from Mozambique is used by Sasol's Secunda operations to convert coal and natural gas into synthetic fuels and chemical feedstocks. Another 35-40% goes to Sasol's chemicals complex at Sasolburg for production processes.

The country may need up to 300-400 petajoules of gas per year, but the current supply is not enough. LNG imports are considered a priority, with two potential import routes: one via Mozambique and another in KwaZulu-Natal. A dual-terminal strategy is recommended, with one terminal in Mozambique to access Rompco and the inland gas market, and another in KwaZulu-Natal to serve LNG-to-power and industrial demand.

South Africa needs a credible gas plan tied to procurement, infrastructure, and industrial policy. The draft South Africa Gas Master Plan has outlined possible future demand: about 400 petajoules a year inland by 2050 and a further 350 PJ a year in coastal regions. Decision-makers must act quickly to avoid a post-2030 gas supply shortfall.