Exxon Mobil eyes South Africa as a top LNG destination

Exxon Mobil has its eye on projects in South Africa, which it considers to be a top destination in the world for liquefied gas (LNG), said a senior gas executive at an African Energy Conference in Cape Town.

The U.S. has the highest natural gas production and is the largest LNG exporter in the world. With several new projects expected to come online, this could lead to a gas glut by the year 2030.

The electricity minister previously stated that South Africa is in talks with Qatar, a rival LNG producer, to secure supplies of LNG for its industry, as imports from Mozambique, whose pipeline supplies most of the gas, begin to dry up.

Exxon Mobil Vice President of LNG Market Development and Origination, Shahrukh mirza said: "We have identified South Africa as a top priority market to seed long-term LNG Sales into the country."

You must build LNG import infrastructure or partner with partners to enable this.

Mirza stated that studies by the U.S. Oil Major suggested South Africa will need between 6 and 7 gigawatts in new gas-fired plants as it moves away from coal fired power plants and towards cleaner forms of energy such as wind and solar.

As part of proposals for a new deal, South Africa proposed to buy LNG from the U.S. worth billions over a period of 10 years. After several failed attempts to propose an agreement, U.S. president Donald Trump imposed a 30 percent tariff on the imports of Africa's most advanced economy in August.

Exxon Mobil affiliates signed a Memorandum of Understanding with Dutch firm Royal Vopak in order to collaborate on a study of feasibility to assess the technical and commercial aspects of a LNG regasification facility in South Africa.

Vopak, with partner Transnet Pipelines, was selected by South Africa last year to develop and operate a LNG terminal in the Port of Richards Bay over a 25-year period.

Mirza stated, "We think that this is just the beginning. We believe that there will be a need for more in the future and we want to participate." (Reporting and Editing by Marguerita Chôy)

(source: Reuters)