10 July 2009
Johannesburg — WITH natural gas reserves insufficient to keep its gas-to-liquids refinery running beyond next year, national oil and gas company PetroSA is looking out for more gas.
PetroSA must secure additional gas for its Mossel Bay refinery amid falling indigenous gas production. According to the company, its offshore gas reserves will reach the end of their plateau by 2011.
In order to keep the plant running, PetroSA is considering importing gas.
Company vice-president for operations Dan Marokane says importation is the only way to provide additional gas feedstock volumes "with certainty" beyond next year.
The company intends to import between 500000 and 700000 tons of natural gas. The gas will be turned into petrol and diesel at PetroSA's gas-to-liquids refinery.
Consequences of discontinued operations at the refinery are dire. These include a loss of $1,5bn a year in refinery revenue and loss of tax revenue.
Closure of the plant would also lead to a loss of employment and disruptions of fuel supply.
The group supplies petrol and diesel to major oil companies which market it through retail networks under their own brand names in parts of the Western Cape, Eastern Cape and Northern Cape.
The company also exports petroleum products to Europe, the US, the Middle East and Asia Pacific.
"Sustainable operation of the (gas- to-liquids) refinery is vitally important for SA," Marokane says. Closure of the refinery would lead to the loss of 36000 barrels a day of fuel to the local and international markets.
Fuel supply is one area in which PetroSA does not want to be found wanting. One of its core strategic objectives is to improve the supply of fuel, oil and gas to the country.
PetroSA's importation scheme has not been without its problems though. The point at which the imported gas will be connected to the pipeline from the F-A Platform has put PetroSA at loggerheads with the community of Vleesbaai, near Mossel Bay.
Situated on the famous Garden Route picturesque Vleesbaai is a tourist attraction. PetroSA, however, wants the natural gas off-loading facility to be as close as possible to the shore while the Vleesbaai community wants it to be far offshore. They are worried about the effect on air quality, marine ecology, noise pollution, property prices and tourism.
PetroSA is making a strong case for locating the off-loading facility as close to land as possible.
Marokane says locating the connection point further from the shore will make off-loading the imported gas difficult under harsh weather conditions. Adverse weather conditions and rough sea conditions can disrupt natural gas supply.
"This impact increases with distance from the land. Indications are that the gas-to-liquids refinery cannot tolerate interruptions of more than 5%. The selection of the liquefied natural gas off-loading position is therefore crucial to the sustainable operations of the gas-to-liquid refinery." The refinery requires an uninterrupted gas supply. Marokane says community concerns will be dealt with in a scope document to be released in a week. Vleesbaai is one of several sites PetroSA is considering for the location of the gas facility.
PetroSA wants to compile a draft environmental impact report in September and this will be finalised and submitted to environmental authorities in October. The company aims to make a final investment decision later next month.
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