MechChem Africa January-February 2023

LNG: a vital component for Southern Africa’s energy transition LNG Hub is poised to become the leading downstream supplier of Liquified Natural Gas (LNG) in SouthernAfrica by providing reliable energy and services solutions that are financially viable, socially responsible, and environmentally sustainable. MechChem Africa talks to Stephen Rothman, LNG Hub's CEO.

S tephen Rothman spearheaded the creation of CNG holdings to expand the provision of Compressed Natural Gas (CNG) inAfrica. “I amstill involved with CNG Holdings and a Director on the board and have joined LNG Hub as CEO to focuson thedevelopment of theLNGindustry in Southern Africa,” says Rothman. One of the perceived challengeswith LNG supply into SouthAfrica is reliability and cost, but Africa holds 9%of theworld’s natural gas reserves. “Having looked at theUnited States and European markets, we concluded that Africa has rich natural gas resources." There is alreadyabigmove inNigeria toset up further liquefication facilities to utilise its large gas resources. Other locations inAfrica, such as Mozambique are also coming online. "Financially anddevelopmentally, itmakes sense to create an African-based LNG supply

In expanding the LNG hub customer base, LNG Hub is currently closing contracts up to March 2023 that will start supplying LNG at the start of Quarter 4of 2024. “We are creat ing depots in Saldanha Bay, Richards Bay and Durban, along with depots in regions across Gauteng, for the supply of peaking and mid merit power demands. We intend to set up joint ventureswithin industries in the private and public sectors to meet needs in the 10 to 350 MW range. “It is important tonote that LNGHub is not targeting Eskom and or government projects that are looking at supplying 1 000 MW or more, which would require floating storage regasification units (FSRUs),” he points out. “Our core focus is on the industrial and mining sectors running furnaces and boilers wherewe canoffer LNGas a direct substitute for paraffin and diesel.

chain that is independent of Europe, Asia and the United States,” he continues. In terms of providing competitive LNG prices compared to those of carbon-based fuels, hesays transitioning fromcarbon-heavy fuels must make financial sense. “We are looking into directly contracting LNG sup plies from the source to the customer. That is a strength, because it bypasses reliance on the European TTF price index, which has gone through the roof in recent times due to the war in Ukraine. "Contracts are directly from the source and link the gas price to the Brent crude oil rates. In this way, any savings on diesel or paraffin will translate directly into natural gas savings,” Rothman explains, adding that this should isolate the local market from exposure to the "crazy” fluctuations seen across Europe.

LNG Hub is directly contracting LNG supplies from the source to the customer, which is a strength, because it bypasses reliance on the European TTF price index.

24 ¦ MechChem Africa • January-February 2023