ONSHORE GAS IN SOUTH AFRICA

This report by the Centre for Environmental Rights examines the risks and financing of onshore gas extraction in South Africa, focusing on the Mpumalanga Gas Project and the Virginia gas field. It critiques the government's positioning of gas as a 'transition fuel' and highlights significant environmental, financial, and transparency concerns.

• The South African government promotes natural gas as a 'transition fuel' through the Integrated Resource Plan 2023 (IRP 2023) and the 2024 Gas Master Plan (GMP). This strategy involves securing gas supply through diversification, developing infrastructure such as pipelines and Floating Storage Regasification Units (FSRUs) at ports like Richards Bay, Ngqura, and Saldanha Bay, and converting existing diesel turbine power stations to gas.
• The Mpumalanga Gas Project, developed by Kinetiko Energy (via its subsidiary Afro Energy), has estimated 2C contingent resources of 4.9 trillion cubic feet (TCF) of methane, later increased by 20% to 6 TCF. The project is funded in part by the Industrial Development Corporation of South Africa (IDC), which entered a joint-development agreement for up to 30 gas wells and holds a first right to participate in up to 45% of the next 60 wells.
• Renergen's Tetra4 project in the Virginia gas field is pursuing a two-phase expansion. Phase 2 aims to produce 34,400 GJ/day of LNG and 4,200 kg/day of liquid helium, with an estimated construction cost of US$1.2 billion. Financing includes secured debt of US$750 million from the US International Development Finance Corporation (DFC) and Standard Bank of South Africa (SBSA).
• The Minister of Forestry, Fisheries and the Environment upheld an appeal on 1 August 2024 against Tetra4's environmental authorisation (EA), returning it to the Department of Mineral and Petroleum Resources (DMPR) for review. The Minister cited significant gaps in geohydrological data modelling and inadequate climate change impact assessments, specifically regarding greenhouse gas emissions estimates.
• There is a significant lack of transparency regarding onshore gas licenses in South Africa. While the Petroleum Agency of South Africa (PASA) has granted licenses to seven companies, information on most is unavailable. The Centre for Environmental Rights (CER) reported that PAIA applications to PASA were unsuccessful and that the IDC refused requests for information regarding its joint venture with Afro Energy, citing confidentiality.
• The report identifies several financial and economic risks associated with gas investment, including the potential for 'stranded assets' as the world shifts to renewables. It notes that the IEA predicts global gas demand will peak in 2030 and decline by 2050, and that up to 75% of LNG projects under construction might fail to recover invested capital under the Net Zero Emissions scenario.

APA

Fraser, A. (2024). ONSHORE GAS IN SOUTH AFRICA. Centre for Environmental Rights. https://cer.org.za/wp-content/uploads/2024/10/CER-Gas-report_WEB.pdf?x21779

Chicago

Fraser, Andrew. ONSHORE GAS IN SOUTH AFRICA. Centre for Environmental Rights, 2024. https://cer.org.za/wp-content/uploads/2024/10/CER-Gas-report_WEB.pdf?x21779.

Wikipedia

{{cite report |last1=Fraser |first1=Andrew |title=ONSHORE GAS IN SOUTH AFRICA |publisher=Centre for Environmental Rights |date=September 2024 |url=https://cer.org.za/wp-content/uploads/2024/10/CER-Gas-report_WEB.pdf?x21779 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fraser2024onshore, author = {Fraser, Andrew}, title = {{ONSHORE GAS IN SOUTH AFRICA}}, institution = {Centre for Environmental Rights}, year = {2024}, month = sep, url = {https://cer.org.za/wp-content/uploads/2024/10/CER-Gas-report_WEB.pdf?x21779}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }