Aspects of the Gas Amendment Bill relat- ing to pricing were some of the main concerns raised during the Department of Energy’s (DoE’s) stakeholder consultation process, DoE chief director of hydrocarbons policy Muzi Mkhize pointed out a final stakeholder workshop last week.

The workshop, which was held in Pretoria, aimed to discuss and finalise the comments and inputs emanating from workshops held across South Africa during May and June, after the Bill was approved for public comment in May.

Attendees of the final stakeholder workshop were particularly concerned about the clause stating that the National Energy Regulator of South Africa (Nersa) would set the maximum gas price, as opposed to only approving the price, as it was currently doing.

Concerns were raised that the focus was being put on setting prices, as opposed to ensuring that a competitive environment existed over the medium and long term.

Mkhize, who chaired the workshop, stated that the DoE wanted to increase the competitiveness of the South African gas market and that it, therefore, along with the various stakeholders, wanted to consider any potential unintended consequences and impacts on investment that might flow from this change.

He added that Nersa was in favour of the provision that had been put forward by the DoE, adding that it believed that it would add more certainty to the market as companies currently operating in the country and those aiming to invest would know which price had been approved.

Nersa representatives attending the workshop stated that, should the regulator be allowed to set the price, it would eliminate the long lead times associated with the approval process by limiting the back and forth communication before the desired price was reached.

One Nersa representative pointed out that the regulator currently set the price for electricity and petroleum and, therefore, did have the capacity and necessary skills to do the same for gas.

Meanwhile, Mkhize also pointed out that access to infrastructure was key to promoting the gas industry, adding that the issue of open access to infrastructure, as opposed to third-party access, still had to be debated.

“We are aware that most gas suppliers entering the market would like to have open access to infrastructure, but the consequences of this have to be considered,” he said.

Representatives from State-owned power utility Eskom pointed out that granting open access to pipelines could lead to significant problems and damage to the pipelines if specific limitations were not imposed.

Meanwhile, the impact of technological advances, in particular the use of gas as fuel for vehicles, on the implementation of the Gas Amendment Bill was also debated.

Stakeholders pointed out that, should gas be used as a vehicle fuel, it would, in effect, be regulated by the Petroleum Products Act, which would directly impact on the Gas Amendment Bill.

The National Ports Act could also potentially impact on the Amendment Bill if gasification infrastructure happened to fall within a port area.

Speaking from the floor, Industrial Develop- ment Corporation (IDC) representative Hannes Malan reiterated the importance of considering the use of gas as vehicle fuel, adding that the IDC was supporting various projects to this end.

“We need to look forward and start planning and, hopefully, the use of gas as a fuel can be included in the legislation,” he said.