The Gas Industry in South Africa

Trends, Fuels & the Role of SLG.

The South African gas industry: An Overview

South Africa has historically relied heavily on coal for electricity generation and industrial energy, while domestic natural gas production has been limited. According to the U.S. Energy Information Administration, in 2022 coal remained the dominant fuel for power generation and natural gas contributed only a small share of primary energy supply.

Key facts:

• The country produced about 930 000 tonnes of natural gas and 104 860 tonnes of associated condensate in 2003.

• Recent data indicate South Africa is the 30th-largest producer of natural gas globally, with a production decline of about 2 % in 2023.

• The upstream oil & gas sector notes that South Africa “does not have significant proven oil and gas reserves” and largely depends on imported or synthetic gas. 

Despite the constrained domestic supply, opportunities for gas infrastructure-expansion remain. For example, the U.S. Trade & Development arm notes that South Africa’s push for natural gas is creating “significant opportunities” in LNG and pipeline infrastructure. 

Challenges & drivers

• Supply constraints: The limited proven reserves mean domestic gas supply is tight, and there is risk of a “supply cliff” if pipeline imports decline. For example, Sasol Limited is advancing an MRG (methane-rich gas) solution to sustain the market beyond 2028. 

• Regulatory/sector structure: The regulatory environment is evolving. Upstream licensing, pipeline access and gas trading arrangements pose complexity. 

• Energy transition pressure: With coal under scrutiny for emissions, gas offers a relatively lower-carbon alternative for industry, power and transport. Although it is not zero-carbon, it plays an important bridging role.

• Infrastructure gaps: Pipelines, compressed gas facilities, LNG terminals and CNG distribution systems require investment to scale.

In sum, the gas industry in South Africa is poised for growth, but the pace and scale will depend on supply, infrastructure and regulation. Against this backdrop, players like SLG are playing a strategic role.

Natural Gas: the baseline fuel for industry

What is natural gas?
Natural gas is primarily methane (CH₄) with small proportions of other hydrocarbons, extracted via conventional or unconventional methods. In South Africa, natural gas has been used historically for petrochemicals, power generation and industrial heating. The DMRE (Department of Mineral & Energy Resources) states that in 2003, natural gas accounted for about 1.5 % of total primary energy supply. 

Why it matters now:

• Its lower carbon intensity compared to coal (for the same energy output) makes it an attractive bridging fuel.

• Industry and transport segments interested in fuel switching (from diesel, LPG or coal) are increasingly looking at natural gas.

• According to Trade.gov, South Africa aims to secure about 300 petajoules of gas demand annually for power and industrial use.

Trends & outlook:

• Natural gas production has been declining slightly (–2 % in 2023) but forecasted to grow with CAGR ~19 % between 2024 and 2028. 

• Given the domestic supply constraints, imports and synthetic gas (see next section) will likely play a larger role.

Role for SLG:
SLG offers natural gas supply solutions for industries that wish to move away from coal, diesel or LPG. By leveraging pipelines and service expertise, SLG is well-placed to assist firms with conversion planning, cost modelling and gas infrastructure connection.

Methane-Rich Gas (MRG): a synthetic and strategic option

What is MRG?
Methane-Rich Gas (MRG) is a synthetic or manufactured gas mixture, produced internally (for instance by coal-to-gas or gasification assets) and composed primarily of methane with nitrogen, argon and sometimes carbon monoxide. In South Africa, it has been identified as a bridging fuel to maintain supply when natural gas access is constrained. For example, Sasol announced that it is advancing an MRG supply solution to sustain the gas market beyond 2028. 

Why MRG matters:

• Because of the tight natural gas supply, MRG allows continuation of gas-fired projects, industrial customers and power plants when imported or pipeline gas is under pressure.

• It leverages local manufacturing capability (coal-to-gas/CTG or GTL infrastructure) rather than relying solely on offshore gas fields. For example, a detailed analysis notes that the plant at Secunda exports a portion of its products as an MRG substitute for natural gas. 

• MRG can help to avoid a supply cliff and support existing gas combustion infrastructure. For instance, a MyBroadband article noted that Sasol plans to redirect MRG from mid-2028 to mid-2030 as a stop-gap. 

Key Considerations:

• While MRG provides supply flexibility, it is still a fossil-based fuel and emits CO₂; hence climate targets may still require a longer-term shift to renewables or hydrogen.

• Industrial users must evaluate compatibility, cost, gas quality and infrastructure when switching to MRG.

• Regulatory clarity and contract terms are important because MRG as a bridging solution is still relatively nascent in South Africa’s gas supply chain.

Role for SLG:
SLG can support customers who are exploring or using MRG. By offering expert consultation, conversion support and supply contracts, SLG can help bridge the gap between traditional natural gas and newer fuels, ensuring industrial continuity and helping firms future-proof their operations.

Compressed Natural Gas (CNG): cleaner transport and remote applications

What is CNG?
Compressed Natural Gas (CNG) is natural gas (main component methane) stored at high pressure (typically 200–250 bar) for use as fuel, primarily in transport (vehicles) or for remote industrial sites where pipeline infrastructure is lacking.

Why CNG is important:

• CNG offers lower carbon emissions compared to diesel or petrol for equivalent energy outputs, and lower particulate emissions, making it attractive for fleet conversion.

• In South Africa, with transport fuel costs high and the push for cleaner energy solutions stronger, CNG represents a feasible alternative for heavy-duty vehicles, bus fleets, logistics companies and remote power/industrial use.

• Firms specialising in CNG infrastructure (compression stations, refuelling networks, vehicle conversion) are entering the market. For example, Trade.gov notes infrastructure opportunities around natural gas including CNG/LNG segments. 

Considerations:

• Capital cost for conversion of vehicles or building a CNG station is a barrier; firms must calculate total cost of ownership (TCO), payback and incentives.

• Infrastructure and fuel-availability remain issues; wider network rollout is required for scale.

• Regulatory and safety frameworks must be adhered to—especially for high-pressure gas installation and vehicle conversions.

Role for SLG:
SLG’s capability to supply CNG (including via its Umbogintwini SLCNG facility) means customers in the transport or remote-site segments can access compressed natural gas through a supplier that understands pipeline, compression, and distribution logistics. SLG can assist with feasibility, refuelling strategy, cost modelling and supply contracts.

Strategic implications for industries, transport and policy

For industries:

• Switching from coal, diesel or LPG to natural gas, MRG or CNG can reduce fuel costs (in many cases) and lower emissions.

• Firms need to conduct conversion studies: gas-fired equipment vs existing, fuel cost trending, emission compliance, downtime risks and supply-security.

• Suppliers like SLG add value by offering not just gas supply, but technical support, safety training, flue-gas analysis and ongoing service.

For transport:

• Fleet owners (buses, trucks) can consider CNG as part of their fuel-diversification strategy; careful evaluation of conversion cost, fuel-availability and payback horizon is key.

• Collaboration with suppliers and infrastructure developers is crucial to secure reliable CNG supply and refuelling access.

For policy & government:

• A robust regulatory framework (licensing, pipeline access, competition, tariffs) is needed to support gas-industry growth. The absence of large proven reserves means supply security must be addressed via imports, synthetic gas (MRG) or LNG. 

• Infrastructure investment in pipelines, compression, LNG/CNG terminals and distribution hubs is critical.

• Gas can be a transitional fuel, but long-term climate goals require alignment with renewables, hydrogen and carbon-capture technologies.

Conclusion & Call to Action – Why SLG is your partner in gas supply

As South Africa evolves its energy mix, gas — in its various forms — is increasingly relevant. Whether you’re an industrial plant seeking to switch to natural gas or MRG, or a transport/logistics firm exploring CNG, you need a supplier who understands the local market, infrastructure issues and conversion challenges.

That’s where Spring Lights Gas (SLG) comes in. With a broad product offering across natural gas, MRG and CNG, technical service support and industry-experience, SLG can partner with you to navigate the gas journey.

Contact SLG today:
Email: info@slgas.co.za
Phone: +27 31 560 6500
Website: www.slgas.co.za