Gas to Power Context (GtP)

In the recently concluded capital market day, Sasol reemphasized the three growth focus areas of (i) Integrated Power, (ii) Gas and (iii) Sustainable Fuels and Chemicals. From a SA inc. perspective gas has been identified as a transitionary energy source to enable a renewables-based future as coal power stations are decommissioned into the future. Further to highlighting Gas a potential growth area, Sasol highlighted that the natural gas supply from Southern Mozambique which has been pivotal to the development of our gas trading business is reaching end-of-life and we will need to change the source of gas. The extensive studies has shown that LNG can be a replacement for Natural Gas (NG), however for affordability reasons, only suitable for a replacement for the third-party gas market, and use for gas-to-power. By creating anchor demand from Gas to Power, it allows economical and affordable LNG sourcing for the current third-party gas customer base.

Gas-to-Power (GtP) in the South African context will play a vital role in bridging the gap between coal fired power generation and non-dispatchable renewable energy. This need was highlighted with the promulgation of the Integrated Resource Plan (IRP) 2019 in which the Department of Mineral Resources and Energy (DMRE) declared an intent to procure up to 3000MW of new GtP generated capacity (IRP currently under review). In December 2023, a Request for Proposal (RFP) was issued by the DMRE under the Gas Independent Power Producer Procurement Programme (GASIPPPP) formally inviting interested parties to bid for up to 2000MW of new generation capacity, the RFP process is currently still active after indication by DMRE to revise the requirements.

Sasol’s Secunda Gas to Power and timing

Gas to Power is positioned as a stable power solution to complement renewable sources, aligning with the energy mix recommended by the Integrated Resource Plan (IRP). Sasol's strategic advantage lies in deep integration benefits with Secunda and its gas trading business, its experience in sourcing and trading gas, as well as building and operating GtP facilities. Additionally, the need to solve the inland Natural Gas Cliff requires a volume encore load to enable the import of LNG affordable for the rest of the industries currently reliant on NG.

Secunda location offers the following advantages:

• The site today utilise a total of ~1360 MW of which ~525 MW is produced from coal boiler generated steam, ~200MW is produced from Gas Turbines and ~635 MW is imported from Eskom- Experience to operating Gas to Power plants
• The Secunda site is a central point for the existing South Africa’s inland NG receiving infrastructure. ~160 PJ/a Gas is received from Mozambique, with ~64 PJ/a used within Secunda, ~56 PJ/a distribute to Sasolburg and ~40PJ/a distributed to the industrial gas users- Existing Gas infrastructure that becomes available with the decline of NG
• The Secunda site is well connected to the Eskom grid with spare Main Transmission Substation capacity that can evacuate ~1000GW of electricity to the South African grid.
• Secunda site has all other supporting infrastructure and skills, well positioned to develop, build, operate and maintain Gas to Power installations.

It is foreseen that the timing for a new gas to power capacity in the tune of ~1000 MW is possible to complete engineering and build the facility for a Commercial Operation Date of 2031 and beyond. This coincides with foreseen life span of the Natural Gas decline bridging solution that Sasol indicated to be evaluating.