South Africa's debut gas-to-power tender fails on supply concerns

CAPE TOWN, Oct 28 (Reuters) - South Africa's first gas tender for private producers to generate 2,000 megawatts of power has closed without a preferred bidder being selected due to gas-supply challenges, the ministry of energy and electricity said on Wednesday.

• After many delays, the Independent Power Producer Office received four bids in May totalling 2,830 MW

• The request for proposals required the bidders to provide assurances of gas supply and they were unable to do so, the minister of energy and electricity said in a statement

• South Africa imports most of its gas from Mozambique, where declining volumes are threatening to disrupt domestic industrial users as supplies are expected to run dry in a few years

• The Industrial Gas Users Association of Southern Africa (IGUA-SA) called the failure a "disaster"

• Gas clients are scrambling to secure alternative supplies ahead of looming deadlines in 2028 and 2030 with approximately 75,000 direct jobs and 700 billion rand ($42 billion) in annual economic activity on the line

• "This failure must now trigger urgent intervention at presidential level," Jaco Human, executive officer at IGUA-SA, told Reuters

• Africa's most advanced economy is pivoting toward gas to reduce its dependence on coal-fired power stations and is developing its first liquefied natural gas import terminal with ExxonMobil XOM.N and Eskom as anchor clients

• There was no indication of when the next gas procurement window would open, although South Africa remains committed to its gas-to-power objectives

  
  

  
  

  ($1 = 16.6591 rand)