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Saldanha IDZ to boost oil and gas sector

Saldanha Bay LPG terminal

Saldanha Bay LPG terminal

31st October 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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The launch of the Saldanha Bay industrial development zone (IDZ) by President Jacob Zuma on Thursday signalled a new era for the development of an oil and gas servicing and repair hub in the Western Cape.

The newly established IDZ was strategically located to serve oil and gas vessels operating along the African coastline, as well as provide an opportunity for components manufacturing in support of the oil and gas industry.

In 2012, 5 800 jobs were created in the oil and gas industry and the sector attracted R1.2-billion of investment into the economy, said Western Cape Finance, Economic Development and Tourism Minister Alan Winde, adding that the IDZ designation would enable the province to position itself as “one of the continent’s oil and gas hubs”.

“There is a huge opportunity for us to claim a larger share of the burgeoning African oil and gas market.”

Currently, the Port of Cape Town accommodated Transocean-owned semisubmerged ship The Marianas, as well as drillship DS-2, for services and repairs, with four oil rigs booked at Western Cape harbours for services between now and December, creating 8 000 job opportunities over a two-month period.

Two more oil rigs were expected to dock at the A Berth in Cape Town and at Saldanha Bay next month.

“For each eight-week stay, these rigs create up to 2 000 job opportunities,” Winde said.

Twenty five per cent of all offshore drill rigs were located off Africa's coastline, as oil and gas exploration and production on the continent had boomed over the past three years, following significant discoveries in East Africa that complemented the already established oil and gas activity in West Africa, added South African Oil and Gas Alliance CEO Ebrahim Takolia.

Ten rigs were expected to be serviced in South African ports this year.

Takolia pointed out that shale gas and offshore exploration in South Africa was also expected to increase domestic activity in the local oil and gas sector in the next three to five years.

“The initial opportunities will arise out of the field services and related activities in the upstream sector, but will also focus on midstream-sector activities, notably logistics and storage, which will develop as the local and regional industry develops."

Takolia said Sunrise Energy, an investor in the IDZ, planned to co-invest in a liquid petroleum gas import facility with the Industrial Development Corporation and Oil Spill Response.

Zuma, speaking at the IDZ unveiling, said the zone could support the expansion of iron-ore mining production and beneficiation in the Northern Cape, and exploit the Saldanha–Northern Cape linked region in an integrated manner through rail and port expansion, as well as back-of-port industrial capacity.

“South Africa has a 3 000-km-long coastline and seven well-equipped commercial ports. These ports are able to function as a hub for commercial traffic emanating from and destined for Europe, Asia and the Americas, as well as the east and west coasts of Africa,” he said.

The IDZ would be managed and operated by the Saldanha Bay Industrial Development Zone Licensing Company – a company funded and established by the Western Cape’s tourism, trade and investment promotion agency Wesgro.

The Western Cape government had injected R25-million into the prefeasibility study, the feasibility study, business planning and infrastructure over a five-year period for the development of the IDZ.

The Western Cape government also launched a R5.8-million artisan development programme which, besides others, aimed to build skills in the oil and gas industry and ensure a match between the supply and demand for skills.

Over the next 25 years, the Saldanha Bay IDZ was expected to add 86% to the gross geographic product, create about 11 975 direct, indirect and induced jobs and attract R9.3-billion in foreign direct investment. It was also expected to generate around R62-billion in foreign exchange.

The government had designated IDZs in the ports of Coega in Port Elizabeth, in East London and Richards Bay and at OR Tambo International Airport as part of South Africa’s strategic integrated projects.

Edited by Creamer Media Reporter

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