Transnet Pipelines CEO Sibongiseni Khathi has announced interventions to prevent SA from running out of natural gas, including the development of a new oil pipeline between Durban and Johannesburg and security improvements to protect oil transported through a pipeline.
The projects sought to secure gas and energy supplies and would be concluded by 2028, Khathi said at Africa Oil Week in Cape Town on Wednesday.
This would avoid a gas cliff, a scenario in which SA runs out of gas resources and supply becomes strained.
The Industrial Gas Users Association of Southern Africa has been warning for years of a looming gas supply cliff when Sasol no longer supplies piped gas from Mozambique from about 2027 or mid-2028.
Khathi said the development of an accumulation facility project in Island View was approved by the Transnet board and was in execution at a cost of about R3bn.
“One is an accumulation facility which will be at the Durban Island View,” he said. “That project is part of the bigger project that we had embarked on of upgrading the Durban-to-Johannesburg pipeline where we installed a 24-inch pipeline.”
He said the project was designed to have two accumulation facilities: one in Durban and one in Jameson Park, Heidelberg. “The Jameson Park one was completed, the trunk line was completed, so what is outstanding is the leg at Island View, which we are doing.”
Khathi said a new jet fuel pipeline, which will run from Heidelberg to OR Tambo International Airport, was being developed to upgrade the network system.
“All of those projects will be funded within Transnet Pipelines. There is a project of an import facility, [in] which we are looking for a private partner to work with in terms of developing the import facility.”
He said the company and partner Royal Vopak were working on a gas project in Richards Bay.
He said Royal Vopak was awarded preferred bidder status alongside Transnet Pipelines to construct the Richards Bay terminal. The next phase would be to sign a terminal operating agreement subject to approvals by the boards of Transnet and Royal Vopak.
He said phase 1 of the gas project would deliver 2-million tonnes a year by the first quarter of 2028, though the utility is working hard to draw that deadline closer to the first half of 2027.
“In phase 2, you are looking at 5-million tonnes of gas that we are going to facilitate and that will involve moving from a floating storage unit to now land-based tanks to be able to increase the capacity for that [storage].”
He said Transnet had “full confidence” in securing the gas supply because “all of the stakeholders are starting to get into one room and starting to discuss the issue of the gas challenge in the country, including the users of the gas, current and potential users.
“Even at a ministerial level, there is support of making sure that we avoid the gas cliff. So, from that point of view, we are confident. I think we are just making sure that we are able to fast-track the projects [and] get all of the relevant approvals to make sure that we are meeting the required deadlines.”
Transnet Pipelines head of business development Kresen Naicker said the agreement between his company and Royal Vopak was a 25-year concession agreement.
“There is a huge focus on this project in the sense that, of course, to meet the demands of industrial gas users as well as gas-to-power developments, both the likes of Eskom as well as the independent power producers that will be coming through as well,” said Naicker.
Khathi said Transnet Pipelines had managed to get fuel theft and vandalism on its pipeline network under control with the help of law enforcement agencies as well as increased arrests, prosecutions, and convictions for damage to critical infrastructure. Instances of fuel theft had halved, he said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.