21 August 2017

Joseph Ngwawi

Southern Africa: Zuma Proposes Body to Facilitate SADC Investment in Natural Gas

Incoming Southern African Development Community chairperson, President Jacob Zuma of South Africa has proposed the establishment of a regional body to develop a strategy to facilitate the exploitation of the vast natural gas resources in the region.

Zuma told the ongoing 37th Ordinary Summit of SADC Heads of State and Government in Pretoria, South Africa that one of the potential game-changers for the region is the recent “discovery of globally significant natural gas resources both onshore and offshore in a number of our member states.”

“As a new initiative, we are proposing the establishment of an Inter-State Natural Gas Committee to share learning for regional gas development and to prepare for the development of the wider gas economy,” Zuma said.

The committee will be charged with ensuring the inclusion and promotion of natural gas into the regional energy mix and “facilitate an increase in universal access to energy as well as industrial development in SADC.”

According to the SADC Energy Monitor launched at the 36th SADC Summit in Swaziland in 2016, the contribution of gas to the regional energy mix is very minimal, accounting for a mere 1.3 percent of the total power generation mix.

However, natural gas is becoming more significant to the region’s energy sector as Angola, Democratic Republic of Congo, Madagascar, Mozambique, Namibia, South Africa and United Republic of Tanzania develop their respective gas-fields.

The main producers of gas in the SADC region at present are Angola, Tanzania, DRC and Mozambique, although Namibia has recently discovered significant reserves of natural gas offshore and South Africa is rich in shale gas and coal-bed methane gas.

The east coast of the SADC region has emerged as one of the brightest spots on the global energy landscape, with large natural gas finds in Mozambique and Tanzania.

Exploration has taken place in other SADC member states although the exact amounts of reserves are unknown for these countries.

New offshore natural gas finds along the Mozambique coast are expected to be a “game changer” for the country and the southern African region. The country has estimated recoverable natural gas reserves of between 15 trillion and 30 trillion cubic feet (tcf), enough to meet one year's gas consumption by the United States.

Tanzania has also identified natural gas reserves of more than 10 tcf from its deep-water offshore region.

Zuma said it is inexcusable that most of the gas reserves are currently being exploited by multinationals domiciled outside the region.

He likened the prevailing situation in the natural gas sector – and indeed other extractive sectors – to a family that sells “a cow which is female knowing fully well that it will be making milk in a few years.”

“Then you spend your whole life buying milk from the person you sold the cow to.”

“Africans must benefit from African resources,” the SADC chair said. “We won’t be becoming difficult if we demand what is ours. We will just be behaving normal.”

He said the proposed committee would be expected to develop a strategy to promote region-wide investment in the natural gas sector by the private sector from southern Africa.

Such a development would go a long way in promoting the exploitation of natural gas and improving the level of access to clean energy in the region.

The average rate of access to electricity in SADC is estimated at around 45 percent, with the figure dropping to less than 20 percent in some member states.

Approximately 190 million people in the region do not have access to electricity, a development that outgoing SADC chairperson, King Mswati III of Swaziland, described as “worrying and demanding urgent action” during an energy investment forum held in the kingdom in July.

He said the situation demands that the region increases generation capacity by an average of 5,000 megawatts of electricity on an annual basis until 2022 in order to achieve the desired access levels. sardc.net

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