Shell teams up with South Africa in gas project

Feb 13, 2002 01:00 AM

Shell joined forces with the South African government in announcing their intention to develop a natural gas industry in the Cape region, with the gas being shipped or piped from Namibia. All options are to be studied in the next six months, on the basis that a concrete recommendation would then be made to government and to Shell's shareholders.
"We have abundant reserves in the Kudu gas field off Namibia, and we are drilling for further reserves and in developing this field, we are looking for markets for the gas," said Yiaw-Hin Wee, Shell's general manager in charge of gas and power. "South Africa is one of the prime markets, and we see opportunities to supply it with Kudu gas."
He said the study would investigate whether the construction of a pipeline would be justified, or whether the gas could be compressed in Namibia and shipped down to South Africa. It would also look at potential clients for the gas, who might include industries such as Saldanha Steel and a planned gas-fuelled powerplant in Western Cape. There would also be an investigation into possible use of Namibian gas in the Mossgas synthetic fuels facilities in Mossel Bay, which is now under the control of the recently formed PetroSA para-statal.

The potential demand for gas at the Omega industrial development zone near Port Elizabeth, with the possibility of a pipeline being constructed between Mossel Bay and Coega, or of the gas being compressed and then brought to Coega by sea, will also be examined. "We know there are potential markets," said Wee.
"We must now evaluate all the options and we are also open to discussions with other energy companies such as Sasol, Mvelaphanda and Forrest. We are open to ideas, and will be looking at all options."
He said Shell hoped to be in a position to make a decision on developing the Kudu reserves by the end of this year, by which time the company would need to have assessed the size and range of the South African market. Rod Crompton, chief director of hydrocarbons at the minerals and energy department, said the study which was being conducted with Shell formed part of the national strategy of further diversifying energy supplies.
"Government is actively facilitating the introduction of natural gas into the economy by engaging with several companies," Crompton said.

Shell South Africa's CE, Errol Marshall, said the development of a natural gas industry in the Cape could bring "much-needed foreign direct investment".
"Globally," he said, "the dash for gas will continue into the 21st century because of the environmental benefits of using natural gas compared to other forms of fossil fuel." "The Kudu gas field development could lead to the introduction of natural gas into the energy economies of the Cape provinces of South Africa and, along with this, boost the prospects for sustainable development based on socio-economic and environmental considerations."
"The Kudu gas field development could lead to the introduction of natural gas into the energy economies of theCape provinces of South Africa and, along with this, boost the prospects for sustainable development based on socio-economic and environmental considerations."

Source: Business Day/All Africa Global Media
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