South Africa is facing a looming gas crisis that threatens to impact approximately 70,000 jobs and could undermine about 5% of the nation’s GDP. This crisis is primarily driven by dwindling natural gas supplies from Mozambique, a critical source that currently meets over 85% of South Africa's gas needs. As production from the Pande and Temane fields in Mozambique is projected to decline sharply by 2026, experts warn of a potential "gas cliff" that could have dire consequences for the country’s industrial sector and overall economy.
On May 7, 2025, the African Energy Leadership Centre at Wits Business School will convene a symposium in collaboration with IGUA-SA to assess the current situation and explore viable solutions for ensuring long-term natural gas supply security in South Africa. Professor David Phaho, Director of the African Energy Leadership Centre, has emphasized the urgency of the situation, stating that without alternative sources of natural gas, the economy may face severe repercussions.
"The gas cliff refers to the depletion of gas from Mozambique’s fields, which currently supply the bulk of South Africa’s natural gas via an 850km pipeline," Phaho explained. He pointed out that industries relying on this gas contribute between R300 billion and R500 billion annually to the South African economy. The imminent decline in gas supply could result in significant job losses, particularly in sectors such as manufacturing, petrochemicals, and steel production, which are heavily dependent on natural gas.
The potential loss of over 70,000 direct and indirect jobs has raised alarms among business leaders and government officials alike. The manufacturing sector, which employs many South Africans, is particularly vulnerable. Phaho noted that both large industries and small to medium enterprises rely on natural gas as an energy source and feedstock for operating critical machinery. "If we run out of gas, we could see entire industrial segments stall or shut down," he warned.
Electricity and Energy Minister Kgosientsho Ramokgopa echoed these concerns, stating that South Africa is indeed heading towards a gas cliff. He remarked, "The gas cliff is not a distant event. It is imminent. But it is not inevitable. We have the analytical tools, institutional memory, and public-private platforms to act." Ramokgopa's comments highlight the critical need for immediate action to avert a national energy and economic emergency.
To address the impending crisis, experts have proposed several strategies. In the short term, importing liquefied natural gas (LNG) is seen as the most viable option. Potential entry points for LNG include the Richards Bay, Durban, and Maputo ports in Mozambique, where gas could be integrated into the existing pipeline infrastructure. Phaho stated, "We must look at regional exploration opportunities," referencing significant hydrocarbon finds in Namibia’s Orange Basin, which South Africa shares. Though these projects are years from maturity, they represent a crucial aspect of the long-term energy security strategy.
In addition to LNG imports, the South African government has developed a Draft Gas Master Plan aimed at creating a diversified and sustainable gas economy. This plan outlines strategies for import diversification, domestic exploration, and infrastructure expansion. However, infrastructure development timelines suggest that many projects won’t be operational until after 2028, which could be too late to prevent the gas cliff.
Moreover, Eskom, the national electricity supplier, and Sasol, a major gas importer and processor, have signed a memorandum of understanding to explore joint gas procurement and infrastructure development. This collaboration aims to safeguard energy supply and reduce reliance on coal while exploring cleaner energy alternatives through shared investments.
Despite the urgency of the situation, some observers have pointed to offshore discoveries made in 2019 and 2020 as potential long-term solutions. However, the Petroleum Agency of South Africa (PASA) has cautioned that these findings, including the Brulpadda and Luiperd wells, are not yet commercially viable. Acting CEO Dr. Bongani Sayidini emphasized, "We have not found gas in this country, not in commercial quantities. Those are discoveries sitting some 175 kilometres offshore." This statement underscores the challenges South Africa faces in securing alternative gas supplies.
While the government’s policy responses and industrial collaborations are steps in the right direction, experts warn that time is running out. Lungile Mashele, an energy economist, stated, "Timing is everything. If we do not bridge the gap between gas depletion and new supply, the country risks a deepening energy and economic crisis." The looming gas shortage is not merely a technical supply issue but a national emergency that threatens livelihoods, industrial output, and energy stability.
As South Africa prepares for the symposium on May 7, stakeholders from government, academia, and the private sector will gather to craft a "gas pact" aimed at securing the nation’s energy future. Phaho remarked, "It’s one thing to admire the problem, but we thought: let’s bring in all the relevant stakeholders to formulate solutions." The outcomes of this symposium could be pivotal in determining the course of South Africa’s energy landscape over the next 25 years.