Oil & Gas
• A liquid-petroleum pipeline is set to run from Mozambique to Mpumalanga.
Mpumalanga is at a critical junction in the liquid-fuels sector in South Africa, positioned as it is on some of the richest coalfields in the world and neighbouring the rich gas fields of Mozambique. The network of pipelines that originates in Mpumalanga and transports gas and liquid fuels to industrial markets in KwaZulu- Natal and Gauteng makes the province a crucial link in the chain.
Although some effort is being made in the alternative-energy field, it would seem that petroleum and gas will not be challenged as the premium sources of energy in South Africa for some time. Production levels in the South African coke and refined petroleum products sector declined by 4.5% in the first semester of 2009, compared to 2008. Imports grew by 33%.
Sasol is an integrated oil, gas and chemicals company with an increasing interest in gas. Products manufactured at the company’s Secunda complex include petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. Gas by-products include oxygen and acetylene, liquefied petroleum gas (LPG), and hydrogen and nitrogen. The primary feedstock for synthetic-fuel production is coal, and the plant is located in
the heart of Mpumalanga’s coalfield region.
Sasol announced in 2010 that it intended to use natural gas from its own plant to boost its capacity to generate power to 600 megawatts by 2012. This would amount to 50% of the on-site needs.
Although this process will cost about R2-billion, the anticipated higher prices expected to be charged by state utility Eskom make the investment worthwhile.
Gas
Sasol Gas is one of the four Sasol operations at Secunda, supplying natural gas to Sasol Synfuels and buying Sasol Synfuels’ methane-rich pipeline gas for selling on to customers in Mpumalanga and KwaZulu-Natal.
Natural gas is an inexpensive alternative to coal. Sasol’s operating profits in its gas division improved by 36% in the year to the end of June 2009. Although the coal industry still has life in it (old fields are being rehabilitated and new ones created) it is a finite resource and South Africa’s growing energy requirements demand that alternatives be explored.
An 865km natural-gas pipeline from Mozambique is at the centre of this initiative to reduce reliance on coal and use a cleaner raw material. The gas substitutes some of the coal used as an energy source at Sasol’s two plants to make chemicals and diesel for industrial customers in Gauteng. This project alone raised South Africa’s usage of natural gas as a primary energy source from 1.5% to 4%.
Eskom, which relies almost entirely on coal to fire its power stations, flared the first gas from its pilot project at Majuba power station near Volksrust in 2007. The innovative underground coal gasification (UCG) project puts Eskom at the forefront of exploring ways of using coal in a more environmentally responsible way. UCG is a process whereby coal is converted into a synthetic power-generating gas underground. Majuba can produce enough gas for the cooking and heating requirements of 1 000 medium-sized houses.
Synfuel
Sasol’s synfuel plant at Secunda in Mpumalanga, about 100km east of the company’s other plant at Sasolburg in the Free State, has the capacity to produce 150 000 barrels per day of liquid fuel from coal. In 2009, Sasol produced seven million tons. It intends taking this capacity out to 7.3 million tons on a regular basis from 2010.
The Fischer-Tropsch method, which is used to extract fuel from coal, has been refined over the years, first through the Synthol process and more recently by using the Sasol Advanced Synthol process. As a leader in synfuel production, Sasol plays a critical role in helping to reduce South Africa’s dependence on imported crude oil.
Sasol is currently involved in the construction of a Sasol Advanced Synthol (SAS) reactor in Secunda, which is expected to increase Sasol’s synthetic-fuels operation by 20% by 2015. Hitachi Power Africa is involved in the construction process. The reactor will produce synthesis gas to be converted into valuable liquid fuels and chemical products.
Petroleum pipeline
Construction on a R6-billion liquid-petroleum pipeline to connect Gauteng to Maputo through Mpumalanga has been delayed, partly due to the global financial situation and to several environmental impact assessments that are taking longer than planned. The company building the pipeline, Petroline Holdings, also wants a licence to increase its capacity before embarking on expensive building work: the project is licensed to carry 3.5 billion litres per annum; the company wants that extended to 5.9 billion litres. Although the need to get more fuel to the Highveld is urgent, construction on this pipeline is only expected to get under way in 2011.
Online resources
PetroSA: www.petrosa.co.za
Sasol: www.sasol.com
South African Oil and Gas Alliance: www.offshoreafrica.co.za
South African National Energy Association: www.sanea.org.za
South African Petroleum Industry Association: www.sapia.co.za
Transnet Pipelines: www.transnet.co.za/pipelines.aspx
