South African coal-export terminal Richards Bay and industrial development zone Coega will be locations for a gas-to-power program to ease the country’s dependence on coal for 70 percent of its electricity. About 2,000 megawatts of generation from liquefied natural gas imports, or LNG, will be allocated to Richards Bay and 1,000 megawatts to Coega, the Department of Energy said in an information memorandum on Monday. The government will now seek bidders to manage the project, which will be underpinned by a power-purchase agreement between the winning applicant and Eskom Holdings SOC Ltd., the state-owned electricity provider. The program coincides with relatively low market prices for the fuel, Trade and Industry Minister Rob Davies told investors at a conference in Cape Town. The move will provide wider opportunities for use including the chemical industry and domestic applications, he said. Africa’s most industrialized economy plans to convert LNG imports into electricity to add 3,000 megawatts to the grid. An additional 126 megawatts is allocated to a domestic gas program and 600 megawatts to the appointment of a strategic partner for a gas-fired plant. The project may help make the country a niche market for LNG amid a growing global surplus of the fuel, BMI Research said in an August report. South Africa may need to source at least 3 million metric tons of LNG a year to supply the generation, Cheniere Energy Inc. said last year. Rising Demand Demand for LNG throughout the country could increase to more than 10 million tons a year after a decade, according to studies by the Department of Energy. That includes long-term demand in KwaZulu-Natal province of 3.1 million tons, Eastern Cape at 3.9 million tons, with the addition of a gas market in Gauteng, Mpumalanga and Free State of 3.2 million tons. “The program is designed to ensure that the LNG import and regasification facilities are complementary to the development of indigenous gas and/or development of a regional gas pipeline network,” the department said. South Africa’s existing pipeline infrastructure is limited. A gas market in Gauteng province was established after Johannesburg-based Sasol Ltd. started to import the fuel by pipeline from Mozambique. Another line, which is underutilized, was constructed to pipe gas to the steel industry and to markets in Richards Bay and Durban. The term of a power-purchase agreement with Eskom for the projects is anticipated to be 20 years from the commercial operation date, according to the memorandum. Interested bidders for the program must submit a request for pre-qualification in February, which will be announced in April. The release of the final request for proposal is expected in August, the Energy Department said.