Sasol Receives Approval to Explore for Natural Gas Offshore S. Africa

South African energy firm Sasol has received formal approval to look for natural gas off the country's west coast joining a list of firms keen to tap into a potential gas market. "The prospecting agreement for block 3A/4A covers an area of 28,395 square kilometers offshore western South Africa in waters ranging in depth from zero meters to 300 meters," Sasol said in a statement. "Sasol is targeting gas prospects with the potential to provide low-cost natural gas to the Western Cape market." South Africa draws most of its energy from abundant coal reserves with gas accounting for just two percent.

While energy authorities say they do not envisage that natural gas will ever replace coal as the main source of energy in the country, the government has made it clear it wants to diversify its energy sources.

The move to reduce its over-reliance on coal is well supported by growing world demand for natural gas which is a cleaner and a more environmental-friendly source of fuel. It is envisaged gas will be used to feed a gas-to-liquid plant and fire the country's first gas power plant in the Western Cape as well as supply a host of industrial users. The gas exploration will be run by Sasol Petroleum International, a wholly-owned unit of Sasol group, responsible for upstream oil and gas exploration and production interests.

The prospecting agreement is effective January 25, 2002 and will run for nine and a half years, divided into five periods. Sasol said it had already completed a minimum work programme covering 300 square kilometers of new three-dimensional seismic data for the first period of 24 months. The remaining four periods are optional.