South African industry launches gas-market platform to develop regional gas opportunities
South African industrial users of gas today announced the launch of GasHub – a not-for-profit, open access gas-demand aggregator that will enable urgently needed gas infrastructure development and support a cost-efficient, resilient, and transparent gas supply chain. This is the first step in the transformation of the gas market in South Africa, creating additional options for gas users and traders in a more competitive market landscape.
• GasHub was officially incorporated with a board of directors and 22 founding shareholders, including representatives of prominent industrial gas traders and gas users across various sectors, including glass, metal, food manufacturing, mining and chemical businesses.
• GasHub transforms what has been a fragmented market into a consolidated and structured market.
• By aggregating demand across multiple industrial users, GasHub creates the market scale necessary to attract international LNG suppliers and infrastructure developers and secure favourable long-term supply agreements.
• GasHub is a not-for-profit entity, constituted on a cost-pass-through basis. It is also open-access, meaning that any prospective users of gas, including state-owned enterprises and independent power producers, are able to join.
• The formation of GasHub will help secure options for alternative gas supply beyond 2028 and ensure South Africa’s gas supply chain can support South Africa’s industrial needs well into the future.
Thomas Shaw, Chief Commercial Officer at Ardagh Glass Packaging South Africa and newly appointed GasHub Chairman, said: “South African industrial users of gas face both a short-term crisis and long-term opportunity if domestic or regional access to West Coast Gas as well as Mozambiquan LNG can be secured. The odds of successfully bridging the impending gas cliff and of securing a cost-effective supply of gas in the long term have been greatly improved by the formation of GasHub, which will allow us to pool and grow our demand to secure an urgently needed supply of gas, and will form the basis of the infrastructural transactions needed to secure South Africa’s energy future.”
GasHub’s Executive Officer, Jaco Human, said: “GasHub and its partners are paving the way for a New Deal for gas in southern Africa – one that enhances energy reliability, economic resilience, and industrial growth through collective strength and strategic collaboration. Gas aggregation paves the way for a less fragmented, more mature, transparent and equitable gas market in South Africa. It is also likely to unlock opportunities in the gas-infrastructure space as the model matures over time. All told, GasHub will allow industry a greater measure of control over its destiny, and heralds exciting times from a capital-investment and growth perspective.”
Gas aggregators are typically incorporated as state-owned or state-operated entities, with risk borne by the state in the national interest, given that the primary and often sole purpose behind their establishment is to secure a steady flow and stable pricing for gas in their respective countries to support their manufacturing and power-generation sectors. In the absence of a such a state-coordinated mechanism in South Africa, industry has been driven to establish this model privately, on a non-profit basis. Industry worked closely with regulators including the Competition Commission and NERSA to advance the establishment of GasHub.
GasHub was formed to, in the first instance, help support the investments required to avert South Africa’s gas cliff. GasHub is looking to partner with, among other key stakeholders, the South African Government to jointly develop fiscal solutions associated with urgently needed LNG storage and regasification infrastructure to avoid the cliff. As set out in industry’s recently released Gas Roadmap for South Africa, several urgent actions are needed in the interest of continued operations and the national economy, including establishing political sponsorship within the Office of the Presidency, the formation of a National Gas Project Team to coordinate across all government departments and industry stakeholders, and confirmation of the state’s LNG-demand commitments.
Human concludes: “GasHub is a huge step forward for the South African gas market, but it is only one piece of the puzzle. Industry is taking the lead, having developed an in-depth Gas Roadmap for South Africa, and having rapidly and resolutely moved ahead with the formation of GasHub. Long-term, constructive collaboration remains critical for the development of associated markets, and we continue to actively engage with all stakeholders with the ultimate goal of enhancing South Africa’s industrial and manufacturing capacity, economic development, and ability to create and sustain employment.”
Shaw concludes: “By taking the lead in the establishment of GasHub, South African industry hopes to pave the way for a mature, stable and growing gas network. A stable gas supply gives businesses the confidence to plan for expansion and helps strengthen the foundations of inclusive, sustainable economic progress. GasHub also contributes to South Africa’s growth and development goals by ensuring energy security that underpins job creation, competitiveness, and industrial expansion. The initiative thus aligns with national imperatives for inclusive and sustainable economic progress.
For more info, please visit gashub.org.za
