A sharp fall in gas supplies in 2028 threatens South Africa’s economy: how to manage the fallout

South Africans are getting used to the term “gas cliff” as pressure ramps up for action to be taken ahead of expected gas shortages. Natural gas supplies from Mozambique’s Pande and Temane fields will begin to fall after 2028 as their production declines. The fields have supplied roughly 90% of South Africa’s gas for more than two decades. Mechanical engineer and lecturer Davies Tsikayi sets out why the looming supply shortage poses serious risks for the country. What’s at stake? South Africa imports a significant share of the gas it consumes from southern Mozambique. The gas comes from the Pande-Temane fields and moves through the Republic of Mozambique Pipeline Investments Company (Rompco) pipeline into South Africa’s Mpumalanga province. The gas cliff matters because gas is not simply another fuel in the energy mix. Although natural gas accounts for only about 2.5% of South Africa’s total energy supply, it carries strategic weight. Roughly 35%-40% of the gas from Pande-Temane is used in Sasol’s Secunda operations, where the South African chemicals and energy company converts coal and natural gas into synthetic fuels and chemical feedstocks. A further 35%-40% goes to Sasol’s chemicals complex at Sasolburg, where natural gas is used in production processes for chemicals including wax, methanol and ammonia. The balance is distributed to industrial and commercial users. Read more: South Africa will run out of industrial gas by 2028 and 70,000 jobs could be lost – why government fixes are lacking Sasol also sells around 20-23 petajoules of methane-rich gas per year to customers in South Africa, including manufacturers of steel, sugar, paper and pulp, and motors. This means the gas cliff should be understood not only as an issue of energy supply, but also as a risk in industrial policy, food security and manufacturing competitiveness. Globally, natural gas provides about 70% of ammonia production and 55%-65% of methanol production. Ammonia underpins fertiliser. Fertiliser underpins food production. Methanol is a building block for chemicals and industrial value chains. In the South African context, gas also keeps furnaces, kilns, boilers and process plants running in sectors such as steel, glass, ceramics, brewing and synthetic fuels. A reduction in gas supply would therefore require more than a simple fuel switch. Affected firms may need to redesign production processes, install new storage and handling systems, absorb higher operating costs, and, in some cases, shift to alternatives with higher emissions profiles. The Industrial Gas Users Association of South Africa’s estimate is blunt: alternatives such as liquid petroleum gas (LPG), diesel or electricity could cost between double and five times what users currently pay for gas, before even accounting for the capital cost of conversion. The implications for industry and jobs are substantial. Industries reliant on this gas supply directly employ around 70,000–100,000 people. Sasol’s wider contribution is even larger: in 2021, its contribution to the South African economy was estimated at about 5% of GDP, supporting roughly 500,000 direct and indirect jobs. The country may need 300-400 petajoules of gas per year – equivalent to 6-8 million tonnes of liquefied natural gas (LNG) – to meet industrial heating and gas-to-power needs. Consequently, the current supply is simply not enough. Delay, in this context, is not a passive position. It increases the risk of higher prices, a weaker industry and greater energy insecurity. What needs to be done? The policy framework and infrastructure needed to import gas are advancing. The draft Gas Master Plan, which identifies Richards Bay in South Africa as a key LNG import location and considers Matola in Mozambique as a regional supply option, has been published. Meanwhile, the terminal projects at both locations have progressed through permitting, and offtake discussions are under way. However, each of these initiatives still requires years of work, while the buffer between the country’s current position and where it needs to be has steadily eroded. The gas cliff is now only a few years away, leaving very little room for further delay. Read more: Gas isn’t a good alternative to coal – South Africa should focus on solar, wind and green hydrogen The first and most urgent option is LNG imports. The independent, non-profit economic research institution Trade and Industry Policy Strategies (TIPS) produced a study in March 2026 on South Africa’s gas landscape. The study makes it clear that South Africa has no choice but to enable LNG imports in the short to medium term. Domestic resources may help later, but they cannot close the near-term gap. The LNG strategy must be practical, not symbolic. Durban and Richards Bay, two of South Africa’s most important commercial ports (in KwaZulu-Natal), could serve as LNG import terminals, but existing pipeline infrastructure is insufficient to supply inland demand. South Africa therefore needs a second import route via Mozambique, through the ports of Matola or Inhassoro, to connect into existing infrastructure serving the eastern interior. Matola is already more advanced, with permitting and environmental approvals granted. The report’s priority is a dual-terminal strategy: one LNG terminal in Mozambique to access Rompco and the inland gas market, and another in KwaZulu-Natal to serve LNG-to-power and KwaZulu-Natal industrial demand. Both must be secured and operational by mid-2030. Regional and domestic gas sources remain essential but are not immediate saviours. Timelines, cost, distance from infrastructure and regulatory delays mean current domestic resources cannot rescue South Africa before the cliff arrives. Demand-side measures also matter. Some users may shift to LPG, diesel, electricity, trucked LNG or compressed natural gas (CNG). Biomethane, green hydrogen and electrification may help in time. But the report is realistic: many alternatives are expensive, technically immature, logistically difficult, or higher-emitting. South Africa’s effective carbon tax, rising from R35/tonne (US$2) in 2024 to R115/tonne (US$7) in 2030, will not by itself force wholesale substitution. What policy decisions are required? South Africa needs a credible gas plan tied to procurement, infrastructure and industrial policy. The draft South Africa Gas Master Plan has already sketched the scale of possible future demand: about 400 petajoules a year inland by 2050 and a further 350 PJ a year in coastal regions. That planning must now become execution. The Department of Minerals and Energy, regulators, state-owned companies and private investors need a clear LNG-to-power strategy. It should set out how much gas the country needs, who will buy it, how it will be priced and stored, and how supply can be adjusted as demand changes. The regulatory system also needs reform. The TIPS report calls for clearer rules on what companies must assess before offshore oil and gas projects can receive environmental approval. It also proposes a specialist tribunal to resolve disputes over those approvals. Broader environmental assessments could help identify suitable areas for development. Marine spatial planning is also needed to manage competing uses of South Africa’s ocean space. These are not bureaucratic footnotes, they determine whether investment arrives before or after the cliff. Above all, South Africa needs coordination. The report calls for a dedicated delivery structure. This could be a new workstream similar to Operation Vulindlela – a government-led initiative designed to modernise the country’s electricity, water, transport and digital communications networks. Or it could be a Rompco-style vehicle that brings the state and private sector together, coordinated by a single gas aggregator. A critical review of the required policy, regulatory, procurement, infrastructure and upstream development activities indicates that decisions must be taken within the next few years to avoid a post-2030 gas supply shortfall. Many of these actions have long development and construction lead times and are highly interdependent. Delays in enabling regulations, permitting processes, LNG procurement, terminal development, or domestic gas projects could significantly affect South Africa’s ability to secure alternative gas supplies before existing supplies decline. Early action is therefore essential to ensure that import infrastructure and domestic production capacity are available in time to support future gas demand and maintain security of supply beyond 2030. The call to action is simple: decide now, procure now, permit now, build now. The cliff will not wait for another master plan. The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

A sharp fall in gas supplies in 2028 threatens South Africa’s economy: how to manage the fallout

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