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

By Reuters News

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

  • After many delays, the Independent Power Producers 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

  • 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

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