Sasol Gas expected to double sales in five years

Oct 12, 2005 02:00 AM

Sasol Gas is expected to double its sales of natural gas in the next five years as the South African gas market increases in size and consumption, a new study shows.
Although gas usage in South Africa amounted to only 2 % of total energy consumption, against an international average of 20 %, projections were that this number was likely to grow significantly as demand increased, US-based NUS Consulting Group said.

Government plans to build two new gas-fired power plants with a combined capacity of 1,000 MW. The minerals and energy department has said the R 6 bn project would be operational by 2008. Power utility Eskom has also announced a R 3,5 bn capital investment programme to build two gas-fired power stations by 2007.
Sasol Gas currently supplies gas to more than 600 mainly industrial customers in bakeries, ceramics, glass and steel manufacturing.

The NUS study says Sasol Gas is expected to double its current sales of 40-mm GigaJoule in the next five years. Prices are likely to remain high, however, due to the company's dominance.
"As the industrial gas market in South Africa is dominated by the Sasol Gas monopoly and Sasol Gas has the exclusive rights to imported gas supplies, with other suppliers reduced to competing for the rest of the market, gas prices remain very high," NUS researcher Stephan Dolk said.

Dolk said gas prices in South Africa rose 24 % last year, resulting in the country becoming the third-most expensive in terms of gas pricing.
"Sasol Gas profits increased about 135 % as of March 2005 and are expected to rise in the next reporting period," said Dolk.

According to NUS, Denmark, at $ 0,9/kWh, has the most expensive gas prices followed closely by Germany and South Africa, both at $ 0,5/kWh.
The least expensive country is Spain, where gas costs $ 0,2/kWh.

Source: Business Day
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