Energy and chemicals group Sasol expects to invest the bulk of the R15-billion to R25-billion it is budgeting to facilitate a 30% reduction in its carbon emissions by 2030 between 2025 and 2027, having spent only modest capital on such projects to date.

The expenditure forms part of the JSE-listed group’s yearly ‘maintain and transform’ capital budget, which is expected to rise to between R26-billion and R27-billion in its 2023 financial year.

Sasol will invest between R500-million and R1-billion during the year on projects designed to improve its environmental performance ahead of a scale-up in such expenditure from 2025 onwards.

The bulk of the ‘transform capital’ will be directed towards the introduction of process changes particularly at the group’s Secunda complex, which is regarded as one of the largest single-site emitters of carbon dioxide globally.

These include technology changes allowing for the displacement of coal with gas, the possible briquetting of coal fines to reduce its use of mined coal and the ramping down of coal-fired boilers as it begins procuring renewable energy from independent power producers (IPPs).

The company says it has agreed key terms with IPPs for more than 600 MW of wind and solar to be introduced before 2025 and is planning to procure 1 200 MW by 2030.

CEO Fleetwood Grobler reports that Sasol is working on future gas supply options, including the possible integration of imported liquefied natural gas (LNG) through Maputo, in Mozambique.

It has, however, been able to extend the gas supply “plateau” from Mozambique by two years to 2028, following infill well drilling.

The prospect of a “gas cliff” has come into focus again recently after Sasol Gas announced, and later delayed, the implementation of a 96% hike in the price of pipeline gas from August 1. Had the increase been introduced, the price of gas charged to South African customers would have increased from R68.39/GJ to R133.34/GJ.

The Industrial Gas Users Association of Southern Africa warned that its members were not only facing the prospect of an “untenable” hike in prices, but also the prospect of gas shortages as production from Sasol’s Mozambican wells tapered.

Sasol says drilling is under way in a bid to find more gas and that it is now moving to explore acreage adjacent to its existing production wells.

The company is also in advanced talks to finalise a term sheet for 40 to 60 petajoules (PJ) of LNG as additional incremental gas supply toward the latter end of the decade over and above its current 160 PJ requirement.

GREEN HYDROGEN & NATREF REPURPOSING

In parallel, the group intends moving ahead with an initial green hydrogen project at Sasolburg, in the Free State, where it will convert an existing 6 t/d electrolyser to operate on renewable electricity.

The final investment decision for the green hydrogen project has been made with the aim of producing the first green hydrogen volumes towards the end of 2023. Details of the project will be announced once Sasol’s investment partner, the Industrial Development Corporation, also approves the investment.

The group is also studying larger green hydrogen prospects that are likely to proceed only after 2030, including the possible creation of a green hydrogen hub at Boegoebaai, in the Northern Cape.

Grobler expresses particular enthusiasm for using green hydrogen to produce a “drop in” sustainable aviation fuel (SAF), which will be produced using the group’s existing Fischer-Tropsch assets.

“SAF remains one of the most promising pathways for the hard-to-abate aviation sector to decarbonise in future.

“The SAF drop-in offering is an attractive aviation-fuel solution and the market is expected to grow massively in the years to come,” Grobler says, revealing that it is currently refining its “go-to-market” strategy in collaboration with others.

He has also announced that a low capital solution has been found to produce Cleaner Fuels 2-compliant diesel at the Natref refinery, in the Fr...