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Nkosinathi Solomon- Group CEO of SLG:SLG Is Ushering in the Dawn of South Africa's Natural Gasage

2017-02-14

SLG markets natural gas and Methane-Rich-Gas (MRG) in Gauteng and KwaZulu-Natal respectively, to commercial and industrial customers. Natural gas and MRG have similar chemical properties albeit with slight differences in methane content and calorific value. SLG customers use gas in a variety of industrial applications. Approximately 38% of SLG's customers burn gas to produce steam, 26% use gas to generate electric power, 30% convert gas to thermal heating, and the remainder utilises gas as a chemical feedstock.

SLG has played a leading role in enabling customers to comply with stricter environmental standards on greenhouse gas emissions and air quality. Often investing its capital, SLG has assisted customers to convert their combustion equipment from utilising dirtier fuels such as coal, heavy fuel oil (HFO), diesel and illuminating paraffin to much cleaner natural gas/MRG. About 40% of SLG MRG sales are to customers that previously used coal as their primary fuel source. These gas consumers are in proximity to residential areas, therefore were under community pressure to reduce their greenhouse gas and particulate matter emissions. Another 49% abandoned coal to comply with stricter environmental legislation imposed on their operations. About 5% of SLG customers were previously consuming HFO and its derivatives. Therefore, SLG is making a significant contribution to the global challenge to alleviate the impact of greenhouse gas emissions on the earth's climate.

According to the International Gas Union (www.igu.org), switching from coal to gas-fired power generation is often the fastest and most cost-effective way to improve air quality and reduce greenhouse gas emissions. Gasfired electricity generation emits less than 50% greenhouse gas emissions when compared to coalfired power stations. The IGU notes that Germany's policy to shift from coal to gas in electricity and heat generation played a crucial role in Berlin's air quality improvements. According to the IGU, Berlin experienced a 95% drop in sulphur oxide (SOx) emissions, 76% decline in nitrous oxide (NOx) emissions and an estimated 83% fall in particulate matter (PM) emissions between 1989 and 2015 owing to the shift from coal to gas.

Currently, natural gas constitutes only 3% of South Africa's energy mix compared to the global norm of 25%. Lack of supply, inadequate infrastructure, and abundance of cheaper coal are throttling South Africa's gas demand growth. The recent discovery of up to 100 trillion cubic feet of natural gas in neighbouring Mozambique is the game changer the natural gas industry needed. A gas pipeline or Liquefied Natural Gas shipping tankers will bring this Mozambique gas to the South African market. The RSA government's recently announced 3000 MW gas to power Independent Power Producer Programme(IPPP) is expected to provide the anchor demand for this gas. SLG anticipates that a largescale gas to power project such as the government's IPPP will stimulate the growth of the industrial and consumer gas markets.

Natural gas/MRG is 35% cheaper than Liquefied Petroleum Gas (LPG), 66% cheaper than illuminating paraffin, and 165% cheaper than diesel on an energy per unit basis. Only coal is cheaper than natural gas/MRG. However, the former fuel's price has to be upwardly adjusted to account for the cost of environmental impact and the imminent carbon tax legislation, which will levy R120 per ton of CO2 equivalent on emissions. Therefore, the conversion of combustion equipment to natural gas is often economically feasible if not a strategically astute move to reduce carbon footprint. SLG facilitates this transition to natural gas by connecting customers to the gas pipeline network for those in proximity to the gas pipeline grid. Clients, who are not located near the gas pipeline system but are less than 150 kilometres from it, can have gas delivered to them by our Compressed Natural Gas trucks. The natural gas age has finally arrived in South Africa.

Potential customers can visit our website on www.slgas.co.za to find a natural gas solution for their needs.

T: 031 812 0555
info@slgas.co.za
www.slgas.co.za




Nkosinathi Solomon- Group CEO of SLG:SLG Is Ushering in the Dawn of South Africa's Natural Gasage

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