Eskom and Sasol Team Up to Explore LNG Solutions Amid South Africa's Gas Shortage Crisis

In a significant development poised to reshape South Africa's energy future, Eskom and Sasol have signed a Memorandum of Understanding (MoU) to jointly explore and assess the country’s future liquified natural gas (LNG) needs. This partnership seeks to secure long-term gas supplies for South Africa, providing certainty for gas users well beyond the next decade. The collaboration will focus on determining the volumes required to establish a sustainable LNG import market and the necessary infrastructure, with support from government-to-government relations where appropriate.

The initiative aims to utilize gas for power generation, ensuring a reliable electricity supply while positioning gas as a key factor in reindustrialization. Additionally, it aims to secure continued market supply by tapping into global LNG resources. By diversifying the energy mix, the collaboration will support South Africa's transition to cleaner energy and help drive decarbonization efforts.

The Memorandum of Understanding (MoU), which marks the beginning of an intensive research and planning phase, was signed with the endorsement of the Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa. Speaking at the ceremony, Minister Ramokgopa emphasized the government's commitment to LNG as a solution for both industrial and energy needs. He highlighted the role of this collaboration between Eskom and Sasol—two major energy entities in the public and private sectors—as a foundation for gas-driven industrialization and the transition to lower carbon energy. Gas, which has become the second-largest source of global electricity production, offers significant environmental benefits, producing less CO2 per unit of energy compared to coal.

Aligned with the Gas Master Plan, the MoU will explore gas sourcing within South Africa, the Southern African Development Community (SADC), and other parts of Africa, alongside assessing long-term LNG contracts. This will support Eskom’s plans to repower and convert its coal-fired power stations to gas in the future. The partnership will also involve other state entities to develop an LNG value chain in the country.

Sasol, as part of its updated gas strategy, is working to ensure future liquified natural gas (LNG) supplies by partnering with Eskom, suppliers, customers, and infrastructure developers. Findings from this first phase of research will guide key stakeholders and investors in advancing South Africa’s energy market while addressing the challenges of long-term LNG imports. Sasol CEO Simon Baloyi and Eskom CEO Dan Marokane both expressed optimism about the collaboration’s potential to enhance energy security and accelerate the country’s transition to a more sustainable energy future.