By Ebi Kesiena
Exxon Mobil (XOM.N) is exploring opportunities in South Africa, which it considers a prime destination for liquefied natural gas (LNG), a senior company executive said at an African energy conference in Cape Town.
The United States, already the world’s largest producer of natural gas and the leading LNG exporter, is set to expand its dominance as a series of new projects come onstream, a trend analysts warn could deepen a global oversupply by 2030.
South Africa, meanwhile, has been in talks with Qatar to secure LNG supplies, as gas imports from neighbouring Mozambique, currently its main supplier through a cross-border pipeline, are expected to decline, the country’s electricity minister has previously noted.
“We’ve identified South Africa as one of the most top priority markets to seed long-term LNG sales into the country,” said Shahrukh Mirza, Exxon Mobil’s vice president of LNG market development and origination.
“That means that you have to build or enable LNG import infrastructure with partnerships for you to do that,” he added.
According to Exxon Mobil studies, South Africa will require between six and seven gigawatts of new gas-fired power capacity as it transitions from coal to cleaner energy sources such as wind and solar.
In May, South Africa offered to purchase LNG worth billions of dollars from the U.S. over a decade as part of a proposed new trade arrangement. However, after repeated failed attempts to secure a deal, then U.S. President Donald Trump imposed a 30% tariff on imports from South Africa in August.
Exxon Mobil affiliates had earlier signed a memorandum of understanding with Dutch energy company Royal Vopak to carry out a feasibility study assessing the commercial and technical viability of an LNG regasification terminal in the country.
Vopak and its partner, Transnet Pipelines, were selected last year to develop and operate such a terminal at Richards Bay Port under a 25-year concession.
“We believe that’s the start, we believe there is going to be a requirement for more and we want to be in that (space),” Mirza said.
