Transitioning SA's Petrochemical Value Chain
How could the role of natural gas at Sasol evolve in future?
Natural gas is preferred to coal for both production and electricity generation due to its lower greenhouse gas emissions footprint. Sasol has identified gas as playing an important interim role in its decarbonisation strategy. However, it is still a fossil fuel, and in the absence of carbon capture, utilisation and storage (CCUS) it is ultimately incompatible with a net zero future.
In their 2022 Climate Change Report, Sasol indicated that it is advancing negotiations to procure 40 to 60 PJ/a of liquefied natural gas (LNG) by 2026 as both a feedstock and energy source for interim decarbonisation activities. This is in addition to replacing the gas from Pande/Temane as these fields decline.
One of the scenarios in the NBI Just Transition Pathways study explicitly explores the use of gas by Sasol as a transition fuel. The study suggests new gas supplies would need to be secured and introduced ‘at scale’ from early 2030s onwards. Towards 2050, gas feedstock would need to ramp down to zero.
Techno-economic modelling indicates that the requirement for gas is contingent on the availability and cost-competitiveness of green hydrogen and sustainable carbon. Therefore, consideration must be given to the pricing and availability trajectories for each of these components to avoid locking into infrastructure assets that might become stranded. Given the rapid decline in green hydrogen costs in particular, there is a strong chance that gas will only be required in the short-to-medium term based on economic reasons, particularly when the implications of the carbon tax are considered.
