Construction of Cape Town’s new independent fuel storage and distribution facility is imminent after Burgan Cape Terminals secured the required environmental authorisation this week.
The approval of the final environmental-impact assessment (EIA), which was submitted to the Western Cape Department of Environmental Affairs and Development Planning (DEA&DP) in October, was one of the final regulatory hurdles for the expectant fuel storage terminal operator.
Oil major Chevron, which had been opposing the project since inception, on Friday expressed its dissatisfaction with the DEA&DP’s approval of the EIA.
“We are naturally disappointed with this outcome and continue to evaluate our options within the regulatory process framework which includes the potential for an appeal,” Chevron spokesperson Delight Ngcamu-Aitken said.
Burgan, which was formed to develop and manage the fuel storage and distribution facilities at the Eastern Mole in the Port of Cape Town for Transnet National Ports Authority (TNPA) for the next 20 years, now aimed to put in place the final necessary permits and licences to start breaking soil on the project that would see a R650-million investment in the first two years of development.
Only the local municipal licences were outstanding; however, there were no indications of further potential delays in securing the approvals, Burgan noted.
All TNPA and other regulatory requirements for the project had already been met, with the National Energy Regulator of South Africa, despite Chevron’s protests, in December issuing Burgan with combined licences for the construction and operation of the petroleum storage facility, the petroleum loading facility and the petroleum pipeline in the Western Cape.
The black-empowered storage company had already signed multiple long-term contracts with major established and emerging customers for the storage and distribution of both locally produced and imported fuels.
“The country’s evident need for the independent storage and distribution facilities is supported by the fact that we have already signed up a number of customers,” said Burgan CEO Muziwandile Mseleku, adding that the DEA&DP’s decision was a “vote in favour” of security of fuel supply and greater competition.
The customers, which Burgan said would mainly offtake their product from Chevron’s oil refinery, would aggregately throughput up to 805 000 m3/y of product.
“The development will also have a positive effect on the economy, on global skills transfer and on the transformation of the local energy sector,” he said, amid protests by the Western Cape’s sole refinery Chevron, which believed that the facility would stifle local production on the back of an influx of unregulated imports.
“There is space for everyone. Oil companies in the Western Cape will and intend to continue to support Chevref's supplies in preference to imports and coastal supplies when the Burgan Terminal is installed. We are a fuel storage company, not a refinery. Burgan has never been a direct competitor to Chevron,” Mseleku concluded.