Transnet believes syndicates have targeted its lucrative crude oil pipeline, particularly in Mpumalanga and Gauteng, from at least 2019, illegally tapping it to divert fuel meant for its customers, which include blue-chip companies such as Sasol.
Initially averaging two incidents a year, the siphoning of crude oil began to spike this financial year, further raising fears about the deterioration of security in the country, which has also affected rail infrastructure and Eskom.
Transnet Pipeline told Business Day that from 2019 to date it has reported 465 cases, which have led to the conviction of 21 criminals.
“We’ve been recording an average of two incidents per year from 2019, but have started to realise a spike in the current financial year.
“We are, however, implementing stringent security measures to address the continuing malicious and illegal tapping within the pipeline network,” Michelle Phillips, CEO of Transnet Pipelines, said.
“We run a pipeline network across various provinces and we do experience incidents in some of these areas. Other pipeline routes are also affected. Working together with law enforcement agencies we have tightened the grip on these criminals targeting our pipeline.”
Transnet Pipeline, an operating division of Transnet which owns, manages and controls SA’s network of 3,800km of high-pressure hydrocarbon and methane-rich gas pipelines, said there are now 39 cases related to fuel theft on the court roll.
The embattled state-owned entity transports about 16-billion litres of product a year, which includes crude oil, diesel, petrol, jet fuel and methane-rich gas. Its network starts in Durban and traverses the Free State, Mpumalanga, Gauteng and the North West.
Razak Okai and George Chiyongo were last week sentenced to 15 years in jail by the Vereeniging magistrate’s court for tampering with essential infrastructure and fuel theft.
Sasol has decried the negative effect of illegal tapping of Transnet’s crude oil pipeline on its fuel operations, which could spell disaster for the economy if left unabated.
Crude oil is imported into SA by private players such as PetroSA and Sasol, which engage in petroleum refining, storage and marketing. Another factor is that the local petrol price is linked to the price of crude oil in international markets.
The R154bn JSE-listed Sasol mainly produces fuel and chemical components and co-products through its three distinctive market-focused businesses: Sasol Chemicals, Sasol Energy and Sasol ecoFT.
Sasol said the theft of crude oil is typically concentrated between Newcastle and Wilge. However, the crude volume spilt from the line has been recovered and has not affected its bottom line, it said, adding that the largely reduced crude rate is affected by the downtime for repairs on the crude oil pipeline.
Supply interruptions
Sasol said it is not in a position to determine whether tapping has been a result of organised crime, but emphasised it is trying to mitigate any potential supply interruptions by holding sufficient contingency crude and product at the Natref refinery.
“Transnet, as the owner and operator, is responsible for the security of the pipeline and has extensive security measures in place,” said Sasol, adding that there is regular collaboration between both companies to ensure optimal operations and mitigate risks to the crude oil pipeline operation.
“Considering the length of the pipeline and the intermittent and unpredictable nature of incidents, it is unfortunately very difficult to fully secure the pipeline with resources available,” the company said.
The SA Petroleum Industry Association (Sapia) said the increasing “security deterioration” in the country is a concern that it has raised with the government. “Our major concern is on the security of the pipelines and rail infrastructure,” the body said, calling for bolder advancements to be made in arresting the source of the crime.
Sapia, which represents the collective interests of the SA liquid fuels industry, said that while the situation is a matter of concern, it has noted a reduction in the frequency of these incidents after a major security investment by Transnet Pipelines.
“Sapia acknowledges the work that has been done by [Transnet Pipelines] and law enforcement agencies to reduce the number of incidents,” it said, but “a lot could be done in ensuring that the kingpins behind this criminality are brought to book”.
Multinational oil and gas company Shell said “generally, line tapping remains an industry concern on security of supply”.
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