Impending gas crisis in South Africa: 70,000 jobs at stake as Mozambique supplies dwindle

South Africa is facing a looming gas crisis as the primary supply from Mozambique shows signs of decline, threatening industries and thousands of jobs.

Currently, over 85% of South Africa’s natural gas, around 160 petajoules per year, is imported from Mozambique, with one major industrial user accounting for nearly 125 petajoules.

This gas supply supports more than 13,000 direct jobs and reportedly contributes about 5% to the national GDP.

However, the gas fields in Mozambique’s Pande region are projected to decline between 2026 and 2028.

Electricity and Energy Minister Kgosientsho Ramokgopa has also warned that South Africa is heading toward a “gas cliff,” and failure to act could trigger serious economic consequences.

“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 said, according to Engineering News.

Some observers have pointed to offshore discoveries made in 2019 and 2020 as potential solutions, however, the Petroleum Agency of South Africa (PASA) has cautioned that these findings, including the Brulpadda and Luiperd wells, were not yet commercially viable.

“We have not found gas in this country, not in commercial quantities. I have just demonstrated and articulated the fact that gas was found in 2019–2020 through the Brulpadda and Luiperd wells by TotalEnergies and partners,” Acting CEO Dr Bongani Sayidini said, according to the public broadcaster SABC.

“Those are discoveries. Those are discoveries sitting some 175 kilometres [offshore].”

Professor David Phaho, Director of the African Energy Leadership Centre at Wits Business School, said the crisis threatens around 70,000 jobs.

"The 'gas cliff' refers to a potential shortage of natural gas for South Africa, and it has serious consequences for our industry as well as jobs in this country," Phaho told the public broadcaster.

"Well over 70,000 direct and indirect jobs could be adversely affected if we run out of gas", he said.

IOL Business