South Africa: Mossel Bay gas-to-liquid reserves close to depletion

Image: capspire.com

During a presentation to parliament, national oil company Petroleum, Oil and Gas Corporation of South Africa (PetroSA) said it expects its Mossel Bay gas-to-liquid refinery to run out of domestic gas supplies by the end of 2020.

Although it has a production capacity of 45,000 barrels per day (bpd) the Mossel Bay gas-to-liquid plant is currently operating at less than half of its capacity due to the declining reserves.

In early 2018, PetroSA proved unsuccessful in its efforts to secure additional gas during a $1 billion offshore drilling campaign. As a result, former Chairman of the Central Energy Fund (CEF), Luvo Makasi concluded that: “We are in a position where between 2020 and 2022 we might not have any gas available.”

The campaign was halted shortly after it found 25 billion cubic feet (bcf) of gas that could be commercially extracted, compared to the expected 242 bcf of gas.

Providing an update on the Mossel Bay plant, PetroSA confirmed that gas reserves are still running low.

“Reserves are close to depletion and are expected to run out by December 2020 and, there is still no sustainable techno-economic long-term solution for the gas-to-liquid refinery,” it said on Tuesday. Adding that: “PetroSA is close to negative cashflows, increasing its cost of doing business and unable to fund its long-term plans.”

The plant began operations in 1992 on the southern coast of South Africa and is considered one of the world’s largest gas-to-liquid refineries.

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