Sunrise Energy, which operates the Saldanha Bay liquefied petroleum gas (LPG) import terminal, has secured a short-term contract with global commodity trader Trafigura to supply the product, after a legal fallout with a previous supplier saw it withdraw earlier in June.
On Thursday, Sunrise said it had entered into a three-month contract with Trafigura to import LPG for the Western Cape market.
Sunrise CEO Rajen Singh said in a statement that vessel imports had arrived and been offloaded at the Saldanha Bay terminal, and further imports were expected over the next few weeks.
“In line with Sunrise Energy's long-term commitment to maintain security of supply, the company has signed a contract that will put in place floating storage of at least 15,000 tonnes to augment the existing 5,500 tonnes capacity of the terminal,” Singh said.
“This will ensure that the Western Cape and regions beyond enjoy security of supply and will also assist in containing prices during the peak winter demand. We would like to reassure the market that the terminal remains fully operational and as previously announced, plans are afoot to expand the terminal’s capacity further.”
Sunrise, majority-owned by Royal Bafokeng Holdings and the Industrial Development Corporation, has a 30-year concession from the Transnet National Ports Authority to construct and operate an LPG import terminal in Saldanha Bay. The group was thrown in disarray two weeks ago when energy giant Vita Gas, which had an exclusive contract to import gas, walked away from the deal following a legal dispute between the parties.
The entities have been locked in a three-year battle over the exclusivity clauses in Vita’s contract, which Sunrise deems uncompetitive.
The dispute came to a head in November when the Competition Commission, after a complaint by Sunrise, found that the contract contravened SA’s competition laws.
The competition watchdog then referred Vita to the Competition Tribunal over allegations of abuse of market dominance in the supply of LPG from import terminals in the Western Cape.
The sudden withdrawal of Vita Gas put the province’s LPG supply at great risk and led to shortages in the market for a few days.
Singh said the entity had opened a process to listen to interested parties who would supply the facility with LPG after the lapse of the short-term Trafigura contract.
“Sunrise Energy will be embarking on a process to evaluate proposals from the market for the use of the terminal to supply LPG beyond September 2023. This process will prioritise improving security of supply and competitive pricing for LPG.”
Downstream suppliers such as Afrox, Easygas and Oryx get LPG from the facility to distribute in the coastal provinces.
khumalok@businesslive.co.za
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