South Africa faces industrial gas shortage by 2028

South Africa relies heavily on piped gas from Mozambique, which currently supplies about 90% of the industrial gas used by major sectors. This supply, delivered through Sasol’s infrastructure, is expected to end in July 2028, although there is a possibility of a short extension to 2030. The approaching deadline is creating uncertainty for industries that depend on a stable and continuous source of high temperature heat.

The industries most at risk include steel, glass, and food production, all of which require consistent heat that cannot easily be replaced. Electricity is not a practical alternative in many cases because it can cost up to six times more than gas for these processes. If no suitable replacement is found, the impact could be severe, with as many as 70,000 direct jobs at risk and more than 400 businesses affected.

The broader economic impact could be significant, with estimates suggesting a loss of between 300 billion and 500 billion rand in annual output. This would represent roughly 4-7% of South Africa’s gross domestic product, which would place additional strain on an already fragile economy. The situation highlights how dependent certain parts of the economy are on a single energy source and how vulnerable that makes the country when supply is uncertain.

Proposed solutions such as building liquefied natural gas terminals have been considered, but experts argue that these projects are too expensive and not well suited to the size of the local market, with costs exceeding 500 million dollars. Instead, many specialists recommend a more flexible approach using propane or liquefied petroleum gas, which can be scaled and delivered using existing infrastructure at ports like Saldanha and Richards Bay. This approach is seen as a practical interim solution that can help bridge the gap while also remaining compatible with a longer term transition to greener energy sources.