DNG Energy promotes the use of liquified natural gas (LNG) for the generation of electricity as an alternative to diesel, heavy fuel oil or any other fossil fuel.

LNG is a cleaner and more affordable source of energy that is available now to power various industries enabling a transition into a net-zero emitting future. The gas-to-power business is important for South Africa and the whole region as we battle energy shortages that have crippled our economies. While we have taken admirable steps to include renewable energy into our energy mix, gas provides baseload capacity, thus giving investors certainty in terms of energy availability on a continuous basis. We are also aware that current efforts to plug our capacity shortages are not enough to give us an adequate reserve margin as we will begin decommissioning some of the old coal-fired power stations. We therefore require technologies that can be deployed quicker and safely.

The gas-to-power business is important for South Africa because gas complements renewable energy in the energy mix by providing a steady, non-variable source of electricity. Furthermore, gas-powered plants can be built far more quickly and cheaply than other baseload plants such as coal and nuclear.

The company says that preparations for gas bunkering at Coega are underway. The company is considering the acquisition of suitable vessels and other associated infrastructure to enable it to receive, store, and deliver LNG. First gas could be shipped as early as September 2021.

DNG says its bunkering operations would include a floating storage unit (FSU) which would be moored at the Port of Coega. This vessel would receive LNG from gas carriers. Small-scale LNG carriers would shuttle between the FSU and ships being bunkered, performing ship-to-ship transfers. The important feature is that the bunkering operation is driven on the back of delivering LNG to onshore customers, in the region, where the small-scale LNG carriers will be utilised. As these vessels are in position fully utilised on other projects, they are readily available to deliver bunkers as and when required.

According to DNG, LNG can be supplied to meet South Africa’s electricity generating capacity shortages. Existing peaking plants, which are mostly gas turbines which have been converted to operate on diesel fuel, and some large diesel-powered reciprocating engines, are used at present outside of peak periods, at an extremely high cost – both in terms of money and environmental damage – just to meet demand and offset the need for large-scale load shedding.

The inclusion of LNG in the energy mix is expected to bring much-needed relief to many customers, especially those which can be supplied from a source off the national electricity grid. LNG would become the main contributor of an efficient and cost-effective deliverable. Plans to exploit the use of LNG to mitigate against load shedding while other options could be described as too costly, too dirty, or too small to be of a major significance.

The company adds that LNG would also be available for all industries, gas-to-power (large and small customers), industrial processes, logistics and mining activities. Gas-to-power, DNG says, is set to become a major contributor to the national grid, helping to meet South Africa’s electricity needs, improve its economy and reduce, or even eliminate, load shedding.