A gas supply crisis is about to arise in South Africa.
Hundreds of South African factories making everything from steel and glass to beer and soft drinks rely on piped gas for industrial heat. Some factories, such as steel mills and glass plants, cannot easily switch to solar power. A glass furnace operates at temperatures in excess of 1,400 °C and requires continuous combustion heat that electricity cannot yet provide at comparable cost or scale.
For others, such as breweries and food manufacturers, electricity could theoretically be an alternative to gas. But it would cost six times more than the current piped gas they use, making their products uncompetitive overnight
South Africa has no gas of its own. For decades, gas from Mozambique's Pande and Temane fields supplied about 90% of South Africa's industrial gas demand. Mozambican gas came to South Africa via a pipeline operated by Sasol, a South African company that converts coal and gas into liquid fuels and chemicals.
But after decades of extraction, Mozambican gas fields are running out of gas.
For this reason, Sasol will stop supplying gas to industrial customers in July 2028. A conditional extension to June 2030 is being explored using gas containing synthetic methane, a by-product of converting coal to liquid fuel. But this still requires approval from the energy regulator and is not a permanent solution.
I am a chemical engineer who spent 25 years in industrial energy research before becoming an academic. I have studied the role of gas supply in the transition to a renewable energy system in South Africa.
If no replacement gas supply is found, 70,000 people directly employed in gas-dependent industries could lose their jobs. Between R300 billion and R500 billion (US$18 billion to US$30 billion) of annual economic output is at risk. This is approximately 4%–7% of South Africa's GDP. More than 400 small businesses, several hospitals and approximately 8,000 homes will also be directly affected.
South Africa needs to import gas in a way that is both technically feasible and economical for its industries.
Liquefied Natural Gas – Too Big, Too Expensive
As early as March 2026, South Africa's Minister of Minerals and Petroleum Resources, Gweda Mantashe, said the government could replace Mozambican gas with imported liquefied natural gas, or LNG.
LNG is natural gas cooled to minus 162 degrees Celsius, converting it into a liquid form suitable for transportation by special vessels. It mostly comes from Australia and Qatar. When it reaches a port, it is placed in large insulated storage tanks before being heated back into gas and fed into the pipeline network when needed. It is an internationally traded fuel, shipped around the world.
For the past 21 years, plans have been made to build South African port infrastructure for LNG, but no project has secured the necessary funding to begin construction. Therefore no LNG has been imported yet.
Building an LNG import terminal is not like building a warehouse. Cryogenic storage tanks, special offloading equipment, systems for heating the gas (re-gasification) and pipeline connections cost a minimum of US$500 million.
The technology, its security systems and specialized ships are not easily diminished. An LNG terminal carries high fixed costs, no matter how little gas it processes. This means that unless it has a large number of committed customers who will require large quantities, companies will struggle to raise the finance needed to build it.
South Korea imports large quantities of LNG, mainly from Australia and Qatar, so it works. But South Africa's overall industrial gas market is less than a fortieth the size of South Korea's. No LNG terminal has ever been built to serve such a small market, and funders will not finance it.
LNG is also three times the current price of gas. Industries that use gas will either have to increase the prices paid by consumers to compensate or may even have to close their operations.
The folly of converting gas to electricity
The South African government and some industries have proposed solving this problem by converting imported gas into electricity and selling it. State-owned electricity providers (Eskom) or independent power producers would commit to burning large quantities of LNG. This way, financiers will pay to set up an LNG terminal, building on a commitment by Eskom to buy LNG over the years.
But this does not solve the problem. This highlights it. Solar and wind are now the cheapest new energy options in the country. The cost of generating electricity from imported LNG will be much higher.
No rational government should lock electricity consumers into above-market tariffs in order to generate revenue to pay for new gas import infrastructure. Investors understand this, which is why no one has committed capital to LNG projects.
Our research shows that any electricity grid powered primarily by wind and solar still needs backup capacity during periods of low wind and cloudy skies, sometimes for several days. But using LNG for this adds too little throughput to recover the cost of a US$500 million import terminal.
The answer no one is discussing
The government has discussed drilling for gas as a solution. Yet the only potential gas basin would require years of appraisal drilling and environmental approval. Yet, they will not produce a single molecule of gas before 2030. Therefore these schemes will be of no use to those industries whose gas will be cut off in 2028.
One possible alternative is liquefied petroleum gas (LPG) or propane, butane, or a mixture of the two. It is a by-product of natural gas processing and oil refining. The cost of import and storage infrastructure for this would be a fraction of the requirement for LNG. It works economically on a very small scale. South Africa already has propane import terminals at Saldanha and Richards Bay. The industry had made this investment years ago.
Eskom has also issued a tender for propane supply to its peak plants. Peaking plants are gas turbine generators that operate only during periods of peak electricity use, such as morning and evening. This is exactly the approach that our research proposed.
South Africa needs a viable gas supply before 2028, and propane is the only option that works at the country's scale. It is a fossil fuel, but emissions are very similar to the natural gas it replaces.
Delivering propane by road tanker carries the same risks as gasoline delivery, which the industry already manages. Existing natural gas pipelines could also be converted to carry propane, eliminating road transportation entirely.
The real advantage of propane over LNG is financial flexibility. When South Africa switches to green fuels such as biogas or green hydrogen, it would be a practical decision to switch to propane rather than close a billion-dollar LNG terminal.
Propane's association with domestic gas cylinders has obscured its potential as an industrial-scale fuel. There is also a subtle force at work: large infrastructure projects systematically attract optimism (costs underestimated, benefits overstated) regardless of whether the economics actually work out.
time to choose
Propane gas is a direct replacement for natural gas in existing appliances. The strategy built around the expansion of wind and solar power, with dispatchable power backup for the national grid and propane providing heat for industries that are affordable and available.
This does not require a US$500 million import terminal. It does not bind South Africa to 25 years of fossil fuel commitments. It does not ask electricity consumers to pay for the installation of gas infrastructure, which the private sector has repeatedly refused to fund.
The gas cliff will come in 2028, whether South Africa is ready or not. The question is not whether South Africa can afford to act. The question is whether he can afford to ignore the answer.
By Craig McGregor, Professor in Mechanical and Mechatronic Engineering, Stellenbosch University
Source: conversation africa