Written by: Thaakira Samodien

Member nations of the Southern African Development Community (SADC) are making great strides towards utilizing untapped gas resources for economic growth. Mozambique, Namibia and South Africa are leading in this area, with efforts to advance energy security changing the way nations approach gas development. Paul Eardley-Taylor of Standard Bank Oil & Gas, Southern Africa, stated at a conference in Cape Town that “Gas as a transition fuel was declared by the European Union in January 2022, but now it looks like gas is a destination fuel,” especially for SADC members.

The shift signifies the growing recognition of gas as a stable, long-term energy source, rather than a transitional solution. In Mozambique for example, a strong portfolio of Liquefied Natural Gas (LNG) projects aim to advance regional energy security while generating critical revenue for the country via exports.

The development of LNG facilities such as the TotalEnergies-led Mozambique LNG project and the Coral Sul Floating LNG development present an opportunity to enhance the global gas supply chain while creating energy reserves to end power shortages and support industrial growth across the SADC region. In this scenario, gas has emerged as a long-term solution rather than a short-term opportunity.

Meanwhile, in Namibia, offshore success seen by energy majors such as Shell have underscored the long-term potential of gas for the region in terms of energy supply and economic progress. Dennis Zekveld, Country Chair of Shell Namibia and General Manager for Upstream Activities in South Africa, shared that the company’s “success in both Namibia and South Africa was attributed to factors like clarity, transparency, strong collaboration and integrity.”

From Shell’s first discovery, Graff-1X, to its last, the company has led strong back-to-back drilling campaigns. Shell’s exploratory success has showcased the potential for large-scale gas developments in Namibia while bringing to the fore an accessible energy solution for the region.

In South Africa, emerging helium and natural gas producer Renergen’s pioneering efforts highlight the potential of harnessing onshore gas for long-term security. The company’s onshore Virginia Gas Project represents a step towards reducing energy import dependency and promoting sustainable practices within South Africa.

“0.4 billion cubic feet onshore, which is not a lot in the eyes of the majors, but in the eyes of the helium world, it is absolutely strategic,” said Nick Mitchell, COO of Renergen in South Africa.

Renergen believes that helium will be a game changer for South Africa, and is expected to play a crucial role in global markets, contributing to the development of semiconductors and microchips for example.

“In January of this year, we produced our first helium and liquid helium,” said Mitchell. “This is an ambitious $1.2 billion project onshore. It consists of drilling 500 wells and it will be the largest campaign that we run for the next couple of years as a country in terms of quantity of wealth and value. It will produce, in helium terms, about 4.2 tons of per day. That’s about 5% of total global demand.”

As such, natural gas has shown to unlock a wave of long-term economic opportunities, from fuel security to industry development to electrification and job creation.

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