Afrelec Africa Energy Gas Liquid Natural Gas

South Africa’s gas-to-power IPP dreams rest on shaky foundations

Nicholas Newman Afrelec November 2016

Port Elizabeth, South Africa - ships in the Ngcura harbour at Couga with the salt works in front
Port Elizabeth, South Africa – ships in the Ngcura harbour at Couga with the salt works in front

South Africa’s inexperienced energy authorities must make choices on building two IPP gas-to-power projects in the face of inadequate evidence and volatile markets, writes Nicholas Newman

AFTER years of discussion, South Africa has issued an invitation to bid for two LNG-to power projects.  The first is a 2,000-MW scheme, based at Richards Bay near Durban, and the second is a 1,000-MW scheme for the Coega Industrial development Zone near Port Elizabeth.

Current plans call for the government to issue a “request for pre-qualification” in November 2016, followed by submission of proposals in February 2017. In April, the prequalification bidders will be shortlisted, probably four or five consortia for each location.

Subsequently, there will be discussions between parties, followed in August 2018 by a
“request for proposal”. Then it is likely that a priced bid will be announced in early 2018, owing to delays caused by the Christmas and New Year holidays in South Africa. This gives a tendering process of just 15
months; such a short time frame could be a matter of concern.

Afrelec November 2016 Issue 44 Pages 6-7 http://newsbase.com/publications/afrelec-africa-power-monitor

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