AES South Africa talks to Egoli Gas Managing Director, Monde Tysusha, about gas reticulation in South Africa.
Where does Egoli Gas fit into the gas sector as South Africa’s only gas reticulation company?
Egoli Gas is an established natural gas reticulation company that provides piped reticulated gas throughout Johannesburg, with 1,200km of pipeline consisting of high pressure lines and another 2,000km of low pressure lines. The high pressure line operates at 20kpa and forms the backbone of the system, while the low pressure line feeds domestic demand at 3kpa.
The company supplies all industrial areas around Johannesburg that are not supplied by Sasol. In addition, it supplies piped gas to domestic users and commercial users such as restaurants, hotels, and hospitals.
Egoli Gas is supplied by Sasol through the Mozambican natural gas pipeline.
Who are Egoli’s biggest customers?
Egoli Gas’ customer base consists of over 7,500 traditional customers in domestic, multi-dwelling, central water, commercial/hospitality and industrial sectors. Industrial customers are their largest, followed by commercial users. The company supplies natural gas to hospitals and also to companies that generate their own power such as MTN, Standard Bank, ABSA, the Parktonian Hotel, Wits Junction and others.
What is the extent of the network?
We cover around 50% of Johannesburg. The longest line runs between Florida on the West Rand to Edenvale Hospital in Ekurhuleni on the east of Johannesburg. This network is well established in suburbs such as Kensington and Rosettenville. From the South, our pipelines run from Nancefield and Aeroton near Soweto through Robertsham and up to Sandton and Randburg in the North. Our network is well established in most of the older suburbs such as Parktown, Emmerentia, and Linden.
How has the residential market performed in response to electricity supply challenges in the country?
While there is a large potential residential market, the barrier to penetration of the market is the cost of conversion from electricity to gas. Most houses are fitted with electrical stoves, geysers and appliances. To use gas requires structural alterations to homes, and replacement of appliances. Consequently, people are wary of conversions and accept the use of electricity. However, the biggest market for residential gas is in renovations and new builds.
What are some of the most significant capital expenditure projects for Egoli Gas?
We have spent more than R200 million in expanding the network and replacing or renewing existing infrastructure since being taken over by the Reatile Group in 2013. In 2015 the network was expanded by 8km in Florida up to 14th Avenue in Fairland, Randburg, adding an entry point to the network area on the west side. This line was designed to deliver 1.5m Gigajoules of natural gas per year and can increase volumes of 2.5m Gigajoules, the pipeline was designed and constructed to support a 10MW power plant at MTN. In 2017, we completed an expansion between Hyde Park and Sandton central. We have also expanded from Kew to Edenvale Hospital to supply the hospital with natural gas for their boilers that were converted from coal.
Our expansion is, however, dependent on customer demand. As a result of slow growth in the economy, we have found that there has been less demand for extensions for manufacturing and other industries over the last few years. As a result, the last new pipeline completed were the Hyde Park – Sandton and also the Linden – Mintek extensions in 2017.
What are the key opportunities for reticulation in Johannesburg?
The Johannesburg City Council has recently pushed for a cleaner environment in the city and is looking for solutions that provide lower carbon emissions. We are able to assist the city and the country in realizing these goals through the use of natural gas. As a result, we would like to work with government to push for natural gas as a sustainable way to encourage industry to grow. At the same time, the expansion of Egoli Gas has the potential to create jobs for the city’s residents, in addition to the expansion of contractor and subcontractor opportunities.
