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Siemens is considering entering a bid for the development of 3 GW of new LNG-fired generation in South Africa, a spokesman for the company confirmed to Gas to Power Journal. The potential bid would come on the back of the LNG to Power IPP Programme announced by South Africa's department of energy in August 2015.
The programme envisages that the some 1 GW of new gas fired generation capacity is to be constructed at South Africa's Coega port, with the remaining 2 GW to be built at Richards Bay.
More specifically, the LNG to Power IPP Programme aims to identify and select successful bidders and enable them to develop, finance, construct and operate a gas-fired power generation plant at each of the two ports, South Africa's department of energy said on its website.
The department also explained it had conducted different studies within the vicinity of Coega (Ngqura), Richards Bay and Saldanha to assess the viability of development LNG to Power projects in these three ports, and that those indicated that Saldanha Bay would require “substantial work not just on the port but on the grid infrastructure, the servitudes for the pipeline and transmission lines and the location for the power plant.”
Therefore, “the first phase of the programme should focus initially on Coega and Richards Bay whilst Saldanha Bay will fall to the second phase of the programme” it said.
The successful bidder will also be required to put in place the gas supply chain to fuel the plant with gas from imported LNG, with the LNG to Power IPP Programme providing “the anchor gas demand on which LNG import and regasification facilities can be established”, as electricity is to be sold on a long-term contract basis to state utility Eskom.
“This will provide the basis for LNG import, storage and regasification facilities to be put in place that can be available for use by other parties for LNG import and gas utilisation development” the department stressed.
“Therefore, Third Party Access will be a fundamental aspect of the LNG to Power IPP Programme” as “this will enable the development of gas demand by third parties and the associated economic development” it explained.
The LNG to Power programme comes in response to South Africa's plan to diversify its energy mix away from an over-dependence on coal, and particularly towards increased use of gas for power generation.
“This programme will serve as an anchor for the gas infrastructure required for the establishment of a gas market in South Africa” according to the department of energy, which added South Africa has “the possibility of introducing a variety of sources of natural gas which could be economically available within a 25 year planning horizon to 2040.”
“Sources could include extensive expansion in natural gas from shale gas, production from deep-water offshore fields and development of a regional natural gas pipeline network” while “indigenous and regional gas can play a critical role in growing the economy of the country and the region.”
