R1bn LPG im­port stor­age plan

Pe­tre­dec and Bid­vest reach agree­ment on big­ger tank ter­mi­nal by 2019

The Star Early Edition - - NEWS - Siseko Njobeni

LIQUEFIED pe­tro­leum gas (LPG) com­pany, Pe­tre­dec has en­tered into an agree­ment with bulk liq­uid stor­age op­er­a­tor Bid­vest Tank Ter­mi­nals for the de­vel­op­ment of a new R1 bil­lion LPG im­port and stor­age fa­cil­ity at Bid­vest’s ex­ist­ing site in Richards Bay.

The Com­pe­ti­tion Com­mis­sion ear­lier this year iden­ti­fied in­ad­e­quate LPG im­port and stor­age in­fra­struc­ture among fac­tors hold­ing back the growth of the LPG in­dus­try in South Africa.

In a re­port on the mar­ket in­quiry on com­pe­ti­tion in the LPG sec­tor, re­leased in April this year, the Com­pe­ti­tion Com­mis­sion said in or­der to en­cour­age the sus­tain­able sup­ply of LPG through­out the year, the fo­cus of this sec­tor should be on con­struct­ing larger im­port and stor­age fa­cil­i­ties.

South Africa nor­mally re­lies on im­ported LPG when de­mand out­strips sup­ply or when lo­cal re­finer­ies are un­der­go­ing main­te­nance shut-downs.

The com­mis­sion said LPG was nor­mally im­ported from in­ter­na­tional traders such as Pe­tre­dec and Geogas.

The traders supplied the im­ported LPG to whole­salers, who in turn on-sell to end user cus­tomers.

LPG us­age in South Africa is largely skewed to­wards in­dus­trial and com­mer­cial users who ac­count for ap­prox­i­mately 85 per­cent of con­sump­tion, with house­hold users con­sum­ing the re­main­ing 15 per­cent.

Bid­vest said on Fri­day that the 22 600 ton stor­age fa­cil­ity would be the re­gion’s largest pres­surised LPG im­port ter­mi­nal, fea­tur­ing four mounded tanks, each ca­pa­ble of stor­ing more than 5 500 tons of gas, guar­an­tee­ing year-round avail­abil­ity.

“De­spite grow­ing de­mand in do­mes­tic and re­gional mar­kets, the LPG im­ports have his­tor­i­cally been ham­pered by high costs re­sult­ing from South Africa’s small coastal ter­mi­nals and dis­tance from major sup­ply hubs.

“The com­mis­sion­ing of this new large-scale fa­cil­ity – also ca­pa­ble of seaborne re-ex­ports to neigh­bour­ing coun­tries – will un­lock pre­vi­ously unattain­able eco­nom­ics re­sult­ing in lower sup­ply prices to the lo­cal mar­ket,” Bid­vest said.

With the break­ing-of-ground planned in Septem­ber this year and an es­ti­mated 27-month con­struc­tion sched­ule, the fa­cil­ity would be op­er­a­tional in the fourth quar­ter of 2019.

The com­pany said 24-hour road tanker and rail­car load­ing fa­cil­i­ties would en­sure con­stant sup­plies 365 days a year, en­abling lo­cal LPG mar­keters to guar­an­tee prod­uct avail­abil­ity to their cus­tomers through­out South Africa.

Bid­vest said Pe­tre­dec al­ready supplied most of South Africa’s im­ported LPG and in­vest­ment in large, ded­i­cated in­fra­struc­ture was the only way to in­crease the fuel’s pop­u­lar­ity and bring lower prices to con­sumers.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.