In South Africa, A New Power Player: Country's Largest Natural Gas Facility Up And Running

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July 12, 2013 2:46 AM EST

Power generation in South Africa got a significant boost this week, with a new gas-powered plant becoming fully operational and boasting a production capacity of 140 megawatts (MW). Sasol Ltd. (NYSE:SSL), a chemicals and energy company based in Johannesburg, South Africa, is behind the project, with help from the Finnish manufacturing contractor Wärtsilä (HEL:WRT1V).
 
Sasol said in a Wednesday press release that the facility, in the industrial town of Sasolburg in the northern part of the country, is now South Africa's largest gas engine power plant and will eventually help the company reduce its own carbon dioxide emissions by a million tons annually. The facility also reduces Sasol's reliance on South Africa's domestic power grid, which is a boon for Eskom, South Africa's state-run electricity supply company. Despite having the continent's largest economy, South Africa is barely able to meet its energy demands -- especially during the current winter season, when daily demand can reach 32,000 MW.

Enca.com reported that Sasol's plant created 44 permanent jobs, in addition to the 500 temporary jobs created during construction.

Eskom is behind schedule on a new power plant called Medupi in the northern province of Limpopo, which was meant to be completed this year but is now unlikely to become operational until 2014. The delay, owing to contractor difficulties and labor disputes, has left officials worried about South Africa's ability to meet ever-growing demands.
 
“The Medupi power station must come on before winter 2014. To date, winter 2013 has proved to be a challenge but a challenge that we’ve been able to deal with," said South African Chamber of Commerce and Industry CEO Neren Rau this week, according to domestic news outlet Eye Witness News. “We need to up our game in terms of showing the world that South Africa will not tolerate low levels of quality and failure to deliver.” The crisis is more than a business concern; today, nearly one-fifth of South Africans live without access to electricity at home. 
 
The Sasol facility was completed ahead of schedule and under-budget. It was a rare spot of good news for a struggling power industry, especially since the turn toward natural gas marks a departure from the more common -- but less efficient -- coal-powered means of electricity generation in South Africa.
 
"This plant is a significant milestone for Sasol, as we begin to ease our load on the national grid and contribute to our own energy efficiency targets," said Sasol executive Lean Strauss. "We are proud of this new facility and it demonstrates how we can add versatility to natural gas."

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