Cape Town-based oil and gas company Avedia Energy has taken ownership of the first set of four liquefied petroleum gas (LPG) storage tanks, which will be installed at the Western Cape’s first permanent LPG storage facility, at the Port of Saldanha.

The company confirmed in March that it would, over a three-year period, build and manage a R300-million LPG import terminal and handling facility at the port, which would provide an overall storage capacity of 8 000 t, boosting the existing import LPG storage capacity in South Africa by at least 80%.

Construction of the import terminal is due to start in July and should be commissioned by the end of the year, after which the gas would be distributed to large LPG users and bottling plants throughout the country.

The first consignment of tanks arrived at the port after a six-week journey from the manufacturing plant in China, and constituted the initial phase of the plant commissioning, which would provide a 4 000 t storage capacity.

Avedia had already secured the yearly import of 100 000 t of LPG from the Bonny River Terminal, in Nigeria, with the first shipment expected to arrive in the first quarter of 2014.

Avedia MD Atose Aguele said the Western Cape was the second-largest consumer of LPG in South Africa, accounting for 120 000 t of the country’s total yearly consumption of 380 000 t of gas, which had created a production shortfall in the province.

As a result, LPG supply was being supplemented by imports and ship-to-road transport from Richards Bay and Port Elizabeth, which Aguele said exposed the end-user to extra transport and handling costs.

“The current LPG shortfall and the erratic production of LPG in South Africa is exacerbated by the country’s handicapped LPG storage and transport infrastructure, which means that South Africans are simply not able to consider LPG as a reliable and cost-effective energy alternative,” he commented.

Aguele estimated that an investment in LPG infrastructure of some R5-billion was required over the next ten years to support the development of a sustainable local LPG industry.

He added that, while the Department of Energy had embarked on a drive to promote the use of LPG as a viable energy source, it was critical that regulators, local players and other sub-Saharan Africa-based LPG suppliers collaborated to accelerate the import and distribution of LPG to the region.

“It is going to require a considerable, collective approach to lift the local LPG industry to a competitive, sustainable and world-class level,” he said.