Freight logistics group Transnet is optimistic of receiving positive responses to a tender for the development of an offshore supply base (OSSB) for the oil and gas industry in Saldanha Bay, reporting that around 120 people attended a tender site briefing this week.
A request for proposals (RFP) was released in April, with bids expected during October for the public-private partnership (PPP) project, which falls under the oceans economy component of government’s Operation Phakisa initiative.
Government wants to establish purpose-built oil and gas port infrastructure at the West Coast harbour, which is currently the export outlet for South Africa’s iron-ore industry.
The RFP is being overseen by Transnet National Ports Authority (TNPA), which is investing R189-million to prepare the berth for a terminal investment by a private operator.
The OSSB is one of three oil and gas-related projects currently being pursued in the port, with the others being a rig-repair facility at Berth 205 and a ship-repair facility at the ‘Mossgas Quay’. Expressions of interest have been called for the other two projects, with RFPs likely to be issued in September guided by the responses.
Executive manager capacity creation and Operation Phakisa programme director Ricky Bhikraj reports that construction and operation of the facilities will be offered to private operators through concession arrangements.
The winning OSSB bidder will be expected to develop both terminal and landside superstructure and TNPA hopes to award the concession by December so that the project can proceed during the course of 2017.
Bhikraj tells Engineering News Online that, in light of the weak market conditions for oil and gas, TNPA has refrained from being overly prescriptive on the terminal and landside infrastructure that should be developed.
Instead it has opted for a “flexible” model, which will be informed by bidder responses. This approach is in line with advice received from its transaction adviser; an EY-led consortium appointed in June 2015. It has also been informed by consultations with domestic stakeholders and by visits to leading oil and gas facilities in Scotland, Singapore, China and Rotterdam.
Bhikraj reports the investors will be given the flexibility to invest in response to demand, which is expected to result in a fully-functional OSSB evolving over time rather that from the start of operations.
He expects the operation to begin as a multipurpose supply base, offering services such as material loading and offloading, storage facilities, including fuel storage and cargo warehouses, as well as office complexes.
The initial “start-up” investment is expected to be in the region of R200-million, with further investments to follow as demand recovers along the African West Coast.
“In other words, we have outlined the menu of service that we think should be supplied without being overly prescriptive,” Bhikraj explains, adding that it did not want a situation where the concession was unattractive to potential bidders.
However, TNPA and government is still convinced of the long-term business case of Saldanha as an oil and gas services hub and expects that, over time, investments of up to R13.5-billion will be attracted into the port.