Jaco Human’s warnings that the country is facing a gas cliff have been ignored for 10 years. The CEO of the Industrial Gas Users Association of Southern Africa says it’s hard to take seriously assurances from mineral & petroleum resources minister Gwede Mantashe at the recent Africa Energy Indaba that the government is moving with “urgency” to ensure security of gas supply.
“South Africa hasn’t moved materially in the upstream development space for the past 15 to 20 years, and that is not likely to change any time soon,” says Human. “The government still doesn’t have a consolidated policy position on gas. We don’t have a gas master plan. Drafts have been issued for the past 10 years or so, but we haven’t seen anything material.”
Sasol, the monopoly supplier of South Africa’s natural gas, “dropped a bomb in the middle of the industry” with its announcement three years ago that it would be terminating supplies from its gas fields in Mozambique in June 2026 because of dwindling reserves.
This meant that heavy users in industries that employ 75,000 people directly — manufacturing, mining, petrochemicals, glass, steel, food and paper — and contribute R700bn yearly to the economy, about 8% of GDP, would be left high and dry.
Sasol, which was allowed by the government to protect its supply monopoly by blocking competing liquefied natural gas (LNG) infrastructure developments, has now adopted “a two-step approach to the gas cliff”, says Human.
It will continue supplying gas until June 2028. Then for 24 months it’s going to switch that off to industrial users and substitute it with synthetic gas from coal.
“So we will have molecules for the next four years. But that’s going to come at a significant cost to the economy, because Sasol maintains that pricing for that gas is not going to be at the same level that we see right now.”
That’s putting it mildly. Human predicts that captive users of Sasol’s gas will “probably” be paying up to 300% more by 2030.
Given that electricity prices will be going up steeply at the same time, the prospects for heavy gas users and ultimately consumers are “definitely not good”, he says.
Though Sasol says the rise will be gradual, it has already applied for a 25% increase in the gas price from July, which, Human says, will have a significant material impact on the competitiveness of the industrial sector. “What concerns me greatly is the energy dynamics we see in the smelting sector. We expect that what is happening in the smelting sector could play out for South Africa over time.”
Because of the government’s policy positions, “or lack thereof”, industrial users don’t have access to domestic or regional gas. “We’ll have to import LNG in future, and that gas is significantly more costly.”
Human says they’re focusing on the monetisation potential of west coast gas in the Orange Basin on the Namibian side of the border. “No-one else is looking at that, so we’re spearheading the development of a programme to look at the long-term viability of bringing in cheap regional gas.”
Their focus is on the potential of landing this gas in Saldanha or Cape Town or even into the existing network of Sasolburg, he says.
These are big infrastructure projects of significant cost and long term in nature, but they believe it’s an economical option. “So we see a play beyond 2035/2040 for west coast gas. We’re definitely focused on that.”
Meanwhile, in 2030 South Africa will have to switch to importing LNG, which will require the development of significant receiving infrastructure.
They’ve got their eye on Richards Bay to service KwaZulu-Natal and the port of Matola in Mozambique. But even at this late hour there’s no certainty about this. They’re looking to the government to play a significant role, but so far Human has seen no sign of this in spite of warning of the approaching gas cliff for more than a decade.
I’m very much for a green energy future, but right now we have an economy to protect and an economy to fire
— Jaco Human
“We cannot yet bank any of these infrastructure projects at a viable level. The main reason is that the government is not fulfilling its role in the development of this sector. In fact, it’s not engaging with the sector at all around the gas cliff. Not at all.”
As part of a strategy to go it alone, the industry formed GasHub in November 2025 with Human as CEO, to secure gas molecules, develop gas infrastructure, supply gas, reshape the marketplace and find commercial outcomes.
But the state has an essential role here too, to provide fiscal support, reduce the cost of capital and above all ensure open access to infrastructure. “This is very important because you may end up with monopolistic moves that would prohibit access to that infrastructure, which may affect energy pricing. We definitely see that potential.”
The government has to create a level playing field and prevent anticompetitive outcomes, he says. “The state’s role is not to replace the market, it is to make the market work properly. At the moment it is simply not performing that role. Without the type of intervention that we believe the state can bring to the party, we won’t get a market, we’ll simply get commercial gatekeepers.
“Unfortunately, the state is nowhere to be heard or seen in these issues. So we as users are very worried about the potential market outcome and market structuring of these developments.”
Without the government playing its role, the challenges of ensuring gas energy security by 2030 are formidable because none of these projects is underwritten or banked yet.
“We’re running out of time. It takes 36 months to develop this infrastructure, so there’s a very small window to reach financial close on these matters,” says Human.
“If the state doesn’t get its act together very quickly then come 2030 there are two significant risks. The one is we run out of gas, which will have a serious outcome for the economy. The second one is long-term economic inefficiency or cost.”
The result, which is already happening, is increasing deindustrialisation.
It’s not the availability of gas which is the issue, he says. Gas is readily available worldwide and South Africa has the ships to bring it in. “The problem is the infrastructure that is required, and the complexity around market failures such as the potential cost and lockouts we start seeing. That requires long-term commitment. And it’s in that commitment where we believe the government has a role to play to provide certain market backstops and fiscal support.”
On top of industrial gas, one has to look at the government’s gas-to-power position, he says. According to the Integrated Resource Plan 2025, approved in October last year, they need to put in about 6GW of gas-to-power by the end of the decade.
“Reaching that target by 2030 is already a stretch which may put us back in the load-shedding space,” says Human.
The Matola LNG terminal hasn’t even reached financial close in terms of investment and development, let alone construction, which will take three years after financial close, which will probably take another 12 months — if there is a credible party that underwrites this and the market is protected.
“The big key here is fiscal support from the government at the very minimum.”
Renewables rather than gas may be the future, he concedes, but they’re not going to be ready to power industry for another 20 to 30 years. “In terms of the upgrades in transmission lines needed, we haven’t even scratched the surface. So we haven’t even started our transition journey despite all the talk.
“I’m very much for a green energy future, but right now we have an economy to protect and an economy to fire.”
Load-shedding may have been addressed for now, but headwinds are coming, he says. And these headwinds concern gas energy availability. “We’re still battling to get the government on board. The solutions are not complex. They’re apparent, they are there, but they’re not getting traction in the government space.”
Industry has begun to doubt if the government understands how dire the situation might very soon be, and whether it even cares, he says.
“If you ask me if the government is really serious about solving this in the most cost-efficient way for the economy, I will say ‘no’.”
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