New multiproduct pipeline, South Africa

13th September 2013

  

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Name and Location
New multiproduct pipeline (NMPP), from KwaZulu-Natal to Gauteng, South Africa.

Client
Transnet Pipelines.

Project Description
Transnet Pipelines, a subsidiary of Transnet, is constructing an NMPP to transport petrol, diesel and jet fuel from Durban to Gauteng, to replace the existing and ageing Durban-to-Johannesburg fuel pipeline.

The full network comprises a 160 km, 16-inch-diameter inland pipeline network, incorporating links from Kendal to Waltloo, Alrode to Langlaagte and from Jameson Park to Alrode; a 555 km, 24-inch-diameter trunk-line from Island View, in Durban, to Jameson Park, in Gauteng (crossing rivers, mountains and wetlands as it rises 1 500 m from KwaZulu-Natal [KZN] to Gauteng); inland and coastal terminals; and three pumpstations.

The network is expected to have a capacity of 1 000 m3/h when brought on stream, which could be scaled up to 3 000 m3/h through the addition of new pumpstations.

The new pipeline is designed to have a life cycle spanning more than 70 years.

The project also entails the upgrading of the Island View station at the Port of Durban.

Value
The project was initially forecast to cost R12.7-billion, but the budget increased to R15.4-billion and eventually to R23.4-billion.

Duration
The first phase of the NMPP was completed in January 2012, with the commissioning of the 555 km trunk line between Durban and Jameson Park; and three pumpstations, situated at Tweni, in Durban, at Hilltop, near Pietermartizburg, and at Mnambithi, near Ladysmith. Three inland pipelines were commissioned in May 2011.

The full system was originally scheduled to be completed and ready for operation by December 31, 2013; however, the project schedule is being revised.

Latest Developments
Public Enterprises Minister Malusi Gigaba has confirmed that the second phase of the NMPP will miss its December 2013 completion date, putting the R23.4-billion project further behind schedule.

The project schedule is being revised, after experiencing delays in the construction of the coastal terminal, or Terminal 1, at Island View, in Durban, owing to “intense and prolonged rain and wind”, which has been described as a “once in 30 years weather event”.

The second phase, which also includes the inland terminal, or Terminal 2, at Jameson Park, near Heidelberg, will now only be completed only in 2014, the Minister has said, despite giving his assurance last year that the second phase would be commissioned on time and within budget.


The NMPP project cost, to date, is R19.3-billion, with another R4-billion still expected to be incurred. “These costs are still forecast not to exceed the project’s budget of R23.4-billion,” Gigaba has stressed.

The NMPP was initially forecast to cost R12.7-billion, but the budget later increased to R15.4-billion and eventually to R23.4-billion, prompting the National Energy Regulator of South Africa (Nersa) to launch an investigation into the cost overruns.

According to financial daily Business Day, Nersa had assigned an independent expert, Cresco Project Finance, to conduct a "prudency review" of the project’s first phase, which could have implications for future petroleum pipeline tariff hike requests from Transnet.

Key Contracts and Suppliers
Nersa (licence); Bohlweki-SiVEST joint venture (JV) (environmental-impact assessment or EIA); Group Five Civils, Spiecapag and WK Construction consortium (construction contract); Arup, in JV with WorleyParsons (engineering, procurement and construction management services and front-end engineering design); Impumelelo (coated-line pipe); McB Marketing and Engineering (mainline check and ball valves); Project Materials South Africa (induction bends); General Electric Nuovo Pignone (mainline and Jameson Park pumps); Aqua Air Cape (launchers and receivers); Filteg (mainline strainers); GE South Africa Technologies JV (generator suppliers); Group Five KZN/Group Five Oil and Gas (pumpstations 1, 3 and 5); Group Five Civil Engineering and Group Five Projects (construction works at Terminal 2); Kinross-based Industrial Supplies Manufacturing Engineering (industrial supply manufacturer and engineer), Krohne (design and supply meter provers), Kentz (project management consultant)

On Budget and on Time?
The project’s timeline is being revised.

Contact Details for Project Information
Aqua Air Cape, tel +27 21 531 1603, fax +27 21 531 1616 or email info@aqua-air.co.za.
Filteg, tel +27 11 606 3784, fax +27 11 606 3787.
Group Five Civil Engineering, tel +27 11 409 6600, fax +27 11 409 6750 or email civeng@groupfive.co.za.
Nersa, tel +27 12 401 4600 or fax +27 12 401 4700.
Spiecapag, tel +33 1 5760 9515 or fax +33 1 5760 9778; or communications, email communication@spiecapag.com.
Transnet media liaison Mboniso Sigonyela, tel +27 11 308 2384/2458, fax +27 11 308 2465 or email mboniso.sigonyela@transnet.net.
Group Five KZN, tel +27 31 569 0300 or email g5kzn@groupfive.co.za.
Group Five Projects, tel +27 11 899 4600, fax +27 11 918 2707 or email projects@groupfive.co.za.
Group Five Oil & Gas, tel +27 31 792 7300 or fax +27 31 792 7340.
GE Transportation media contacts, tel +33 6 35 24 92 33.
Krohne, tel +27 11 314 1391 x 203.
Mineworkers Investment Company, tel +27 11 484 6814, fax +27 11 484 7062 or email info@mic.co.za.
Arcay Burson-Marsteller, on behalf of Kentz, tel +27 11 480 8512.

Edited by Creamer Media Reporter

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