South Africa: SA Has 'Four Months' to Avoid a Natural Gas Day Zero As Sasol Contract Supply Crisis Looms

analysis

Sasol will stop supplying natural gas from Mozambique when its contract with the country ends in June 2026. The halt of gas supplies to South Africa will have dire consequences for the economy and job security in the country.

Industrial gas users said South Africa's government is not heeding its repeated warnings about the worst-case scenario in which the country runs out of natural gas by June 2026, when petrochemicals manufacturer Sasol will stop supplying the resource from Mozambique.

The gas users have also accused the government of not moving fast enough to resolve the looming crisis.

The halt of gas supplies to South Africa will have dire consequences as the resource is estimated to support as many as 70,000 jobs and contributes up to R500-billion a year to the domestic economy.

Gas is used by industries including steel, chemicals, glass, food and others in Gauteng, Free State, KwaZulu-Natal and Mpumalanga.

A Day Zero -- a situation in which South Africa runs out of gas -- will also impact individuals and businesses, said the Industrial Gas Users' Association of Southern Africa (Igua-SA), which represents industrial gas users such as Consol Glass, Illovo, Nampak, Mondi, ArcelorMittal, South32, South African Breweries and Coca-Cola. These companies depend on uninterrupted gas supplies for their operations.

Igua-SA said some 400 smaller to medium-sized businesses, several hospitals and roughly 8,000 households will also be directly impacted by the disruption in gas supplies.

Jaco Human, executive...

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