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Eastern Cape poised for exciting Energy Developments – Advancing Oil and Gas opportunities

The Eastern Cape (EC) Province is emerging as an energy hub, reflective of South Africa’s (SA) approach to a diversified energy mix. South Africa’s sunshine coast has prioritized unlocking the Oceans Economy through advancing the Oil and Gas (O&G) opportunities in the province. Marking the 19th annual African Utility Week, which will take place in Cape Town from 14 – 16 May 2019. The EC province will play a pivotal role in highlighting the potential of the province and its progress from an Energy front.

“Our participation in one of the discussion panels will touch on the continued progress the EC Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) has put in the O&G strategic framework for the province as well as ongoing activities,” says Bongani Gxilishe, Head of Department DEDEAT. “The strategic framework is aimed at enabling a rapid & coordinated development for the province to meet the demand for identified products and services within the gas-to-power value chain and to ensure that progress within the LNG sector provide for maximum localised benefit,” says Gxilishe.

The above approach is integral to the medium term objective of enabling and unlocking the exploration of indigenous O&G. To note, the province has been actively advancing its readiness for the establishment of gas-enabling infrastructure at Coega as one of the preferred locations identified in the country, thus minimizing the risk of uncertainties. Through collaboration and cooperation with various State organs and private developers, the CDC has conducted extensive preliminary readiness work, including technical feasibility studies and advancing EIAs relating to the gas-to-power infrastructure. Also, the province has been proficiently conducting studies that look at the industrial gas utilisation beyond the 1000 MW gas –driven power generation.

The significance of the EC is that it is endowed with the possibility of both onshore and offshore gas, gas-driven power generation, and gas importation, handling, trans-shipment infrastructure, as well as industrialisation. Potential recoverable quantities of indigenous natural gas are in the order of 20 trillion cubic feet onshore (shale gas), and 26 trillion cubic feet offshore.

“The recent deepwater drilling in Brulpadda (approximately 1 billion barrels) in the Southern Outeniqua basin could potentially unlock enough fuel to supply South Africa’s refineries for almost four years. That’s a boon for a country that has always been short of oil and is running out of its scant domestic supply of gas,” adds Gxilishe.
“This could potentially unlock a value chain of marine/ maritime services located at Coega SEZ which could in turn trigger opportunities eastwards including nodes such as the East London IDZ and small harbours along the Wild Coast. The Brulpadda-1 and the potential for more discoveries positions the Eastern Cape as an active O&G province,” highlights Gxilishe.

In line with SA’s developmental programme, indigenous gas extracted in this province must be beneficiated on our shores, maximising the economic benefit yielding within the region. The EC, through DEDEAT, has initiated a strategic framing process for the provincial oil, gas and maritime complex, which has provided much greater clarity and support for the socio-economic development of the gas industry. The province, with its gas support initiatives organized in a coherent framework, is well positioned to drive the enablers for a gas economy.

Active Energy Projects in the Province:
Coega SEZ projects
• Dedisa Power Peaking Plant (Zone 13) – the 342MW Power Peaking Plant, located in the Coega Special Economic Zone is a R3.5 billion Foreign Direct Investment. The project has been operational since September 2015 and created over 1490 jobs during its construction phase.
• Wind Tower Manufacturing (Zone 3) – wind tower assembling plant R310 million investment located at the Coega SEZ. Created over 390 jobs during construction.
• Lay Down Area (Port precinct/Zone 1) – abnormal cargo related to the REIPPP programme (Logistics). This is a R9 million investment that has contributed to the distribution of wind turbines throughout the EC.
• Electrawinds (Zone 6) – an investment valued at R1.2 billion wind turbine that powered the World Cup Stadium in PE during 2010 World Cup.

Sample of initiatives in the EC Province
• Utility Scale Renewable Energy – the province is host to 16 wind farms and 1 solar farm, with a total installed capacity of over 1500 megawatts. 13 Facilities have been commissioned while the remaining 4 are under construction. Numerous other facilities are at a preparatory phase for participation in future procurement rounds.
• The Eastern Cape Minigrid Project – a first of kind service delivery hybrid minigrid in a deep rural community of the province, providing high quality electricity to 68 households. The project is currently under construction.
• East London Industrial Development Zone – host to renewable energy manufacturing facilities such as the ILB Helios Solar Panel Assembly.