Johannesburg, South Africa — 04 April 2013 – The National Energy Regulator of South Africa (Nersa) says that South Africa is a good place for more investment in the gas market.

Addressing the media here as reported by Fin24, Nersa member Ethel Teljeur said: “What we are trying to do with the pricing methodology is to give a signal to new entrants that South Africa is in fact a good place to bring additional gas, make a reasonable return, and be able to expand your business as you see fit.”

Nersa had to balance attracting new investment with calls from existing customers for the price of piped gas to remain low. For new entrants to enter the piped gas market, they needed to get good, creditworthy customers, she said. The customer should then need large volumes of gas, which would enable the required facilities to be built.

Teljeur said determinations the minister of energy had made in terms of the Integrated Resource Plan for electricity, which proposed gas as one of the resources for electricity generation, was an added impetus.

“Also, there is a lot of gas being discovered on the east coast of Africa. Of course there is a shale gas potential, but we don’t know at this stage. All of those, as well as increases in electricity prices, make the case that increasing the use of gas is a good decision.

“We hope that that will stimulate new entry and customers will see gas as a viable alternative,” she said. In the past, people had found gas expensive because electricity was so cheap, but now that electricity prices are on the rise, gas demand will increase and more people will consider it an affordable alternative,” she added.

Source: Fin24. For more information, click here.