The 2016-17 edition of KwaZulu-Natal Business is the eighth issue of this highly successful publication that, since its launch in 2008, has established itself as the premier business and investment guide to the KwaZulu-Natal province in South Africa.
The province is unique in terms of its abundant natural and human resources, and is also one of the key drivers behind the South African economy.
To complement the extensive local, national and international distribution of the print edition of the magazine (15 000 copies), the full content can also be viewed online at www.kwazulunatalbusiness.co.za.
Updated information on KwaZulu-Natal is also available through our monthly e-newsletter, which you can subscribe to online at www.globalafricanetwork.com, in addition to our other business-to-business titles that cover all nine provinces, complemented by our flagship publication, South African Business.
OVERVIEW Oil and gas Oil
OVERVIEW Oil and gas Oil and gas companies are exploring off the coast of KwaZulu-Natal. SECTOR HIGHLIGHTS • Statoil has acquired 35% of oil exploration rights in the Tugela South field. • A gas-to-power project is mooted for the Richards Bay Industrial Development Zone. • Vopak has increased its storage capacity. • Sasol and Eni are working together in offshore exploration. The search is on for oil off the coast of KwaZulu-Natal. Tugela South is an area off the coast where exploration rights were first granted to Impact Oil & Gas in 2011. Various studies have been done and ExxonMobil came on board as a shareholder and later, as operator in 2013: they were joined in 2015 by Statoil. The Tugela South Exploration Right covers in the region of 2.8- million acres and future rights encompass an additional 16-million acres offshore (SAinfo). Rhino Oil and Gas and Sungu Sungu Gas are also actively exploring for oil and gas in the province, while Sasol has a three-year permit to explore off the coast of the province. Sasol has signed a partnership for Italian multinational company Eni to be the operator of the exploration effort. KwaZulu-Natal is home to two major oil refineries and is the first link in the pipeline chain that connects the Gauteng province (the industrial heartland of South Africa), with vital fuels. The Port of Durban handles 80% of South Africa's fuel imports. KwaZulu-Natal is thus a key player in the country’s oil and gas industry. Royal Vopak, which runs a large terminal at the Port of Durban, has expanded capacity to 174 000m³ and is planning to grow its ability to store fuel still further. It is also planning a new storage facility at Heidelberg that will cater for petroleum and chemicals. Towns along the N3 highway are increasingly receiving investments in the logistics sector. Getting fuel to the province of Gauteng is the key mission of the new multi-purpose pipeline (NMPP) which started delivering fluids in early 2012, with the full first phase coming on line a year later. The NMPP terminals allow for greater flexibility in supply. Refined products such as jet fuel, sulphur diesel and both kinds of octane petrol are carried. The infrastructure of Transnet Pipelines reportedly reduces the number of fuel tankers on South African roads by about 60%. The liquid fuels and gas networks of Transnet Pipelines trav- KWAZULU-NATAL BUSINESS 2016/17 74
OVERVIEW erses KwaZulu-Natal from west to east and north to south. The petroleum network has intake stations at both Durban refineries, while the gas pipeline runs from Secunda to Durban, with diversions to the manufacturing hubs of Newcastle and Richards Bay, and along the coast between Durban and Empangeni. Transnet Pipelines employs 658 staff, with about 200 located at the head office in Anton Lembede Street in downtown Durban. (among other things) in fuel products. The modifications to the refinery will bring it into line with the tougher legislation regarding fuel production that is in the pipeline. The Enref refinery owned by Engen can produce 135 000 barrels per day. This sophisticated refinery can convert light and heavy crude oil into high-value products that include jet and diesel fuel, solvents, bitumen, sulphur, bunker oil and aviation gasoline. Safor is a base-oil production facility (jointly owned by Engen, Caltex and Total, but operated by Engen) that produces 45% of Southern Africa’s base oils. Engen also owns the adjoining Lube Oil Blend Plant, which produces in excess of 72-million litres of finished lubricants every year. KwaZulu-Natal has the second-highest consumption of diesel fuel of South Africa’s provinces (17.8%) and the third-highest consumption of petrol (15.4%). Petroleum KwaZulu-Natal’s two oil refineries produce large volumes of a wide range of products. They are important regional and national assets as their joint production accounts for more than 300 000 of the 700 000 barrels of refined crude oil that South Africa produces. BP, one of the joint operators of the Sapref refinery located south of Durban, spent R1.4-billion on energy infrastructure in South Africa in the period to 2013. South Africa’s biggest refinery is Sapref. Owned jointly by Shell SA Refining (25%), Thebe Investments (25%) and BP Southern Africa (50%), it has a capacity to produce 180 000 barrels per day. The refinery also makes propylene feedstock, solvents, sulphur, asphalt, industrial-processing oils and liquefied petroleum gas. Sapref has started a 'cleanfuels' project, aiming to reduce sulphur and benzene levels Gas In the Richards Bay Industrial Development Zone a gas-to-power project has been proposed by the zone's managers. The plan involves importing gas from the nearby Mozambique gas fields by ship or pipeline. An even more attractive option would be if gas were found off the coast of Richards Bay. The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbed-methanegas exploration rights in KwaZulu-Natal to NT Energy Africa, which has a partnership with the Central Energy Fund. These awards are for onshore exploration. The Petroleum Agency SA is an agency of the National Department of Energy. Plants in Durban, Pietermaritzburg and Richards Bay produce a variety of industrial, household and medical gases. End products include acetylene welding products and compressed-oxygen cylinders. Air Liquide is spending R100-million on expanding its liquid-nitrogen plant in Richards Bay, and Afrox has budgeted R500-million for moving its headquarters to an 111 000m² site at Cornubia Industrial Estate near Umhlanga. Operations will be moved from the Port of Durban, Pinetown and Seaview. The new plant will be expected to fill 5 000 cylinders every day. ONLINE RESOURCES National Energy Regulator of South Africa: www.nersa.org.za Petroleum Agency SA: www.petroleumagencysa.com South African National Energy Association: www.sanea.org.za South African Petroleum Industry Association: www.sapia.co.za Transnet Pipelines: www.transnetpipelines.net 75 KWAZULU-NATAL BUSINESS 2016/17
