South Africa is about to have a gas supply crisis.
Hundreds of South African factories, making everything from steel and glass to beer and soft drinks, depend on piped gas for industrial heat. Some factories, like steel mills and glass plants, can’t simply switch to solar. A glass furnace operates at over 1,400 degrees Celsius and requires sustained combustion heat that electricity cannot deliver yet at comparable cost or scale. For others, like breweries and food manufacturers, electricity could theoretically substitute for 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. The Mozambican gas came to South Africa through a pipeline operated by Sasol, a South African company that converts coal and gas into liquid fuels and chemicals. But after decades of extraction, the Mozambique gas fields are simply 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 synthetic methane-rich gas, a by-product of converting coal into liquid fuels. But this still needs 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 South Africa’s transition to a renewable energy system. 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 to$30 billion) of annual economic output is at risk. This is roughly 4%-7% of South Africa’s GDP. Over 400 smaller businesses, several hospitals and around 8,000 households will also be directly affected. South Africa needs to import gas in a way that is both technically feasible and affordable for its industries.
Liquefied natural gas – too big, too expensive
In early March 2026, South Africa’s minister of minerals and petroleum resources, Gwede Mantashe, said that the government might replace the Mozambican gas with imported liquefied natural gas, or LNG. LNG is natural gas chilled to minus 162°C, which converts it to a liquid form suitable for transport by specialised ships. It mostly comes from Australia and Qatar. When it arrives at a port, it is held in large insulated storage tanks before being warmed back to gas and fed into the pipeline network when needed. It is an internationally traded fuel, shipped around the world. For the past 21 years, there’ve been plans to build South African port infrastructure for LNG, but not one project has secured the funding needed to begin construction. So no LNG has yet been imported. Building an LNG import terminal is not like building a warehouse. The cryogenic storage tanks, specialised offloading equipment, systems to warm up the gas (regasification) and pipeline connections cost a minimum of US$500 million. The technology, its safety systems and specialised ships do not scale down easily. The LNG terminal carries high fixed costs no matter how little gas it processes. This means that unless it has a number of committed clients needing high volumes, companies will struggle to raise the finance needed to build it. South Korea imports a large amount of LNG, mainly from Australia and Qatar, so it works. But South Africa’s entire industrial gas market is less than one fortieth the size of South Korea’s. No LNG terminal has ever been built to serve a market this small, and funders won’t finance this. LNG is also three times the current cost of gas. Industries that use gas will either have to increase the prices that consumers pay to cover this or may even shut down their operations.
The folly of turning gas into electricity
The South African government and some industries have proposed solving this problem by turning imported gas into electricity and selling it. The state-owned electricity provider (Eskom) or independent power producers would commit to burning large volumes of LNG. In that way, financiers would pay for an LNG terminal to be set up, based on Eskom committing to buying LNG for years. But this does not solve the problem. It exposes it. Solar and wind are now the cheapest new energy options in the country. Generating electricity from imported LNG would cost far more. 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 none have committed capital to the LNG projects. Our research shows that any electricity grid powered mainly by wind and solar still needs backup capacity during low wind and overcast skies, sometimes for days at a time. But using LNG for this adds far 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 basins would need years of appraisal drilling and environmental approvals. Even then, they would not produce a molecule of gas before 2030. So these plans won’t be of any use for industries whose gas will be switched off in 2028. A potential alternative is liquefied petroleum gas (LPG) or propane, butane or a mixture of the two. It is a byproduct of natural gas processing and oil refining. The import and storage infrastructure for this would cost a fraction of what LNG requires. It works economically at much smaller scale. South Africa already has propane import terminals at Saldanha and Richards Bay. Industry made this investment years ago. Eskom has also issued a tender for propane supply to its peaking plants. Peaking plants are gas turbine generators that only operate during periods of peak electricity use, such as early morning and evening. This is exactly the approach our research had 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 the emissions are very similar to the natural gas it replaces. Delivering propane by road tanker carries the same risks as petrol delivery, which the industry already manages. Existing natural gas pipelines can also be converted to carry propane, eliminating road transport entirely. The real advantage of propane over LNG is financial flexibility. When South Africa shifts to greener fuels, like biogas or green hydrogen, switching to those from propane will be a practical decision rather than a billion-dollar LNG terminal write-off. Propane’s association with household gas cylinders has obscured its potential as an industrial-scale fuel. There is also a subtler force at work: large infrastructure projects systematically attract optimism (costs underestimated, benefits overstated) regardless of whether the economics actually work.
Time to choose
Propane gas is a direct replacement for natural gas in existing equipment. A strategy built around expanding wind and solar, with propane providing dispatchable electricity backup for the national grid and heat for industries, is affordable and available. It does not require a US$500 million import terminal. It does not lock South Africa into 25 years of fossil fuel commitments. It does not ask electricity consumers to pay to set up gas infrastructure that the private sector has repeatedly declined to fund. The gas cliff arrives in 2028, whether South Africa is ready or not. The question is not whether South Africa can afford to act. It is whether it can afford to keep ignoring the answer. Expert Insights provided by Craig McGregor, Professor in Mechanical and Mechatronic Engineering, Stellenbosch University. This article was originally posted on theconversation.com and is republished here under a Creative Commons license. Read the original article here.
