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South Africa Gas Users Plan Venture to Secure Supply Before 2026

Employees pass gas pipework at the Sasol Ltd. Sasol One liquid fuels facility in Sasolburg, South Africa, on Thursday, Feb. 24, 2023. Sasol, South Africa’s second-biggest producer of greenhouse gases, set a target of cutting its emissions of climate-warming pollutants by 30% by 2030 and said it aims to have net-zero emissions by 2050. (Waldo Swiegers/Bloomberg)

(Bloomberg) -- South Africa’s industrial gas users are planning to form a company that will ensure supply after the sole provider of the fuel said it will halt the flow in 2026.

Sasol Ltd., which has provided gas to customers through the 865-kilometer (537 mile) Rompco pipeline from its fields in Mozambique, has said it will stop the supply in two years. The Industrial Gas Users Association of Southern Africa, a lobby group with members including Arcelor Mittal SA and Coca-Cola Co., has warned that without fuel supply companies will have to fire workers and shut businesses. 

“A non-exclusive joint venture agreement is being concluded with approximately 30 large and small users of piped gas in South Africa,” the group said in a statement. It’s planning an externally funded, private company based on a cost-pass through model.

A feasibility study outlining the legal, regulatory, economic and operational viability of the proposed company has been concluded. 

“Constructive discussions continue with Sasol and international oil companies, gas infrastructure developers and operators to ensure continued gas supply beyond 2026,” the group said.

©2024 Bloomberg L.P.

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