Western Cape Business 2017 edition

OVERVIEW Oil and gas The

OVERVIEW Oil and gas The Western Cape Government is hoping to exploit opportunities related to the gas sector. SECTOR INSIGHT A new LPG terminal will be commissioned at Saldanha in 2017. • Chevron wants to sell its refinery. • A new fuel storage terminal is being built in Cape Town harbour. Thirty-two companies are set invest in the Saldanha Bay Industrial Development Zone (SBIDZ). These companies are in the oil and gas, and servicing and logistics sectors. The idea of providing infrastructure and incentives at the SBIDZ in these sectors is reaping rewards. Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is used for the export of South Africa’s iron ore. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. Reduced global prices for oil and troubles in the container ship market have caused some stress in the local sector – DCD Marine went into voluntary business rescue in November 2016 – but the long-term prospects for shipping and oil and gas are still strong enough for national government to pursue Operation Phakisa (which includes a strong maritime economy push) and for Transnet National Ports Authority to spend heavily on upgrading the nation’s ports. Considerable planning has gone into positioning the SBIDZ as a hub for a range of maritime repair activities and oil rig maintenance and repair. (A separate article on the SBIDZ appears elsewhere in this publication.) But Saldanha has not been chosen by the national Department of Energy (DoE) to host a gas-to-power plant: Richards Bay and Coega (Port Elizabeth) have instead been listed as the sites for 2 000MW and 1 000MW potential, if private investors for projects at those ports can be found. The Provincial Government of the Western Cape has asked the DoE to reconsider and wants Saldanha to be allocated at least 1 000MW potential for private companies to consider bidding to run such a power plant. If gas was used to generate power, the next step would be for factories to consider using gas and then the whole energy mix could be changed. The Western Cape Ministry of Economic Opportunities sees the potential of gas in the context of working together with wind and solar energy. Gas, a CSIR report has concluded, could be a very good support for renewable energy during times of peak demand. Another possible gamechanger is shale gas. The Council for Geoscience (CGS) is doing an intensive study of South Africa’s WESTERN CAPE BUSINESS 2017 90