South Africa Plans LNG Plant to Ease Power Shortage, Poten Says

By Dinakar Sethuraman

Aug. 20 (Bloomberg) -- South Africa plans to build a liquefied natural gas import terminal and hire two tankers which can process the gas onboard to meet demand for the fuel from power plants and prevent power cuts, a consultant said.

Eskom Holdings Ltd., which generates about 95 percent of South Africa's electricity, and PetroSA, South Africa's national oil company, plan to build a LNG import terminal and power plant at Coega Industrial Development Zone in the south, and hire two so-called floating storage and re-gasification vessels, Poten & Partners said in a report e-mailed today.

Power blackouts earlier this year cut output at South Africa's gold and platinum mines and the country faces shortages until 2012. Eskom relies mainly on coal-fired generators and aims to increase the use of gas, with the planned LNG projects supplying as much as 3.4 million tons a year of the cleaner- burning fuel.

PetroSA may announce a winner for the tankers in September after inviting bids from Golar LNG Ltd., an LNG shipper whose chairman is Norwegian billionaire John Fredriksen, and Bluewater Energy Services BV, the report said.

Eskom plans to bring another 293 megawatts of gas-fired generation online by the middle of 2009 in addition to the existing 445 megawatts.

Liquefied natural gas is gas chilled into liquid form for shipment by tankers to destinations not connected by pipelines. It then gets reheated, a process known as re-gasification, for distribution to users.

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