Gas key to just energy transition

21st January 2022 By: Halima Frost - Reporter

Local industry body the South African Oil & Gas Alliance in October hosted a webinar on ‘The Role of Gas in the Just Energy Transition’ which was attended by both upstream and downstream service providers and investors.

The webinar included sessions by State-owned power utility Eskom, and State-owned oil company Petroleum Oil and Gas Corporation of South Africa.

Further contributors to the event included oil and gas exploration companies Bastion Oil &Gas and Kinetiko – which is referred to as Afro Energy locally. They outlined the progress of current projects in South Africa, while financial institution Standard Bank discussed ‘Parameters for Gas Financing in the Just Energy Transition’.

Notably, Bastion Oil &Gas pointed out that since being granted a technical cooperation permit in June, it had immediately started applying for exploration rights.

The presentation also elaborated on why coalbed methane will be instrumental in the gas-to-power solution for South Africa.

Additionally, it unpacked its objectives in the South African oil and gas sector, including finding a low-cost entry point as well as creating significant shareholder value.

Other plans include establishing a world-class oil and gas team using local industry specialists and becoming a partner of choice for independent oil companies entering South Africa, thereby aiding compliance with its broad-based black economic empowerment requirements.

Kinetiko presented updates on its operations during the webinar, including the fact that the company in August received approval to consolidate three exploration rights into a single block called 12 3 271 ER.

These exploring rights are situated in and around the Volksrust and Amersfoort areas, in Mpumalanga.

Three survey areas were identified for surveying; however, one, south-east of Volksrust, had to be changed after it was brought to the company’s attention that it included a major watershed river feeder and that mining houses were being challenged in court for their attempts to prospect there.

A total area of 564 km2 and 13 349 km will be flown, which amounts to a total of 8% of the company’s acreage.

About two dozen core and permeability test wells have been drilled to date, all of which cut gas in the borehole profiles.

The company stressed it would properly quantify every source presented as a transformative solution in terms of its real carbon footprint, no matter how inconvenient that truth may end up being.

It will also look at the huge benefits, in terms of carbon output, that the US, China, and other countries have gained over the last five years by replacing coal with gas and will seek to try to emulate that path in South Africa.

The company also agreed that natural gas was “absolutely and undeniably instrumental” as a transition fuel.