The Industrial Gas Users Association of Southern Africa (IGUA-SA) was establishing a gas-aggregator company GasCo, in an attempt to stave off “natural gas Day Zero” for industrial users and ensure security of supply, it announced yesterday.
Sasol announced last year it would be halting supply of natural gas to downstream consumers in June, 2026 which will have a major impact on several industries most predominately the manufacturing sector.
Jaco Human IGUA-SA CEO said, “Gas aggregation paves the way for a more mature, transparent and equitable gas market in South Africa. We anticipate that GasCo would be a platform to enable inclusive, effective, long-term participation alongside the government, Sasol, international oil companies, gas suppliers and transporters, and financial institutions, all of whom would play a critical role in the process moving forward.”
The formation of GasCo will aim to enable and secure alternative gas supply within the timeframes needed to avert permanent damage to South African manufacturing and employment.
“South African industrial users of natural gas employ in excess of 70 000 people and contribute more than R500 billion per annum to the South African economy,” IGUA-SA said in a statement.
GasCo will act on an inclusive basis as an intermediary marketplace across the entire gas supply chain, facilitating the development of gas supply infrastructure, sourcing, transport, and distribution of gas to offtakers.
This includes consolidating the demand from the various offtakers, negotiating with gas infrastructure developers, suppliers and systems operators for efficient pricing and terms of gas delivery to help bridge the gap between supply and demand.
IGUA-SA said a non-exclusive joint venture agreement was being concluded with approximately 30 large and small users of piped gas in South Africa following the earlier conclusion of a memorandum of understanding.
GasCo would take the form of an externally funded, private company based on the guiding principles of cost-pass through (thereby operating as a non-profit), full transparency, a low asset and operational base and proportional representation.
Gas aggregators are typically incorporated as state-owned or state-operated entities. In the absence of a such a state-coordinated mechanism in South Africa, industry has been driven to establish this model privately, on a non-profit basis.
“The private sector is compelled to carry the additional fiscal burden associated with such an initiative in the interests of continued operations and the national economy,” IGUA-SA said.
In South Africa, the current demand for gas (300PJ/a) has already exceeded the limited supply (180PJ/a).
“The potential development of gas demand in Southern Africa is principally contingent on decisions to invest in long-term domestic production as well as short and medium-term investment in liquefied natural gas import and distribution infrastructure,” IGUA-SA said.
By taking the lead in the establishment of this GasCo, South African industry hopes to pave the way for a mature, stable, and growing gas network in Southern Africa.
“However, the process remains fraught with risk and unresolved challenges. The biggest risk faced by industry remains gas energy security from 2026 onwards. Constructive discussions continue with Sasol and international oil companies, gas infrastructure developers, and operators to ensure continued gas supply beyond 2026,” IGUA-SA said.
Human said: “We are confident that the establishment of the GasCo is a necessary first step towards a broadly beneficial outcome. Long term, constructive collaboration remains critical for the development of associated markets.”
Two months ago Mineral Resources and Energy Minister Gwede Mantashe released the long-awaited draft Gas Master Plan.
It recommended a massive drive towards more natural gas exploration projects, while simultaneously calling for the importation in the short term of liquefied natural gas (LNG) from neighbouring countries to address South Africa’s energy-mix on the back of gas shortages.
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