Gas-field discovery may free South Africa from oil importing
Resource-rich South Africa may soon become even richer. It appears a natural gas field worthy of commercial production has been discovered offshore. Converting the gas to liquid fuels could help satisfy this country's need for imported oil and further blunt the use of boycotts by outside nations to punish South Africa for its racial policies.
Natural gas would further strengthen South Africa's already impressive resource position. It is the noncommunist world's largest producer of gold, has an abundance of coal and diamonds, and exports a number of so-called strategic minerals. The world's largest uranium mine is in Namibia, a territory controlled by South Africa.
The ultimate prize - oil - is not yet in sight for South Africa. A spokesman for Soekor, South Africa's state-financed oil-exploration company, said the natural gas field that looks so promising does not yet show signs of having any large quantities of associated oil.
There remain a number of hurdles to be jumped before South Africa can count on producing natural gas. The resource appears to exist in sufficient quantity. Soekor says it is ''near'' finding the 1 trillion cubic feet of gas reserves it feels are necessary for commercial production.
But South Africa now produces no natural gas. That means the costs of an entire infrastructure for producing and transporting natural gas has to be considered before the offshore field is deemed commercial. Lacking production of natural gas, South Africa has developed no markets for the gas. Homes are heated electrically, and the nation's power industry is fired with domestically produced coal.
This means that even once it is certain that 1 trillion cubic feet of natural gas exist in the offshore field, the costs of converting the gas to products usable in South Africa will enter the equation.
A Soekor official said consideration was being given to a range of products, including ammonia and methanol as well as diesel fuel and gasoline. The technology for converting natural gas to these products is well established but expensive.
South Africa is already in a relatively strong position despite not having any domestic oil and the formal boycott by the Organization of Petroleum Exporting Countries. South Africa uses liquid fuels for about only 25 percent of its total domestic energy needs, a low figure compared with the world's industrialized nations. And its three synthetic fuel plants, which produce oil from coal, provide a substantial amount of the country's liquid fuel requirement.
The remainder of locally consumed oil is imported under secret agreements. Although South Africa has often paid a premium for its imported oil, it has been readily available in recent times due to the world oil surplus.
South Africa earlier this year began generating electricity from its first nuclear power station, which is located north of Cape Town. And many experts predict that South Africa's nuclear power industry will be expanded to other parts of the country.
The natural-gas field that looks so promising lies about 60 miles offshore, off Mossel Bay in the Indian Ocean. Soekor has been sinking exploratory wells in the area for several years and has had a number of encouraging ''shows.''
Once Soekor is certain the field contains the necessary reserves of natural gas, the government will assess the feasibility of producing, distributing, and using the gas. Even if the cost equals that of imported oil, development might be a more attractive alternative to Pretoria than remaining vulnerable to boycotts, analysts point out.