Progress in the drafting of a 20-Year Liquid Fuels Infrastructure Road Map has been sluggish, but the country still appears to be on the cusp of a revival in investment into its liquids fuel infrastructure, with a number of storage and logistics projects beginning to take shape.

The process was arguably kicked off a few years ago, when Transnet pulled the trigger on the 555 km New Multi Product Pipeline (NMPP) from Durban to Johannesburg, which has been criticised for major cost and schedule overruns.

The NMPP’s price tag surged from the original 2006 estimate of R9.5-billion to R23.4-billion and the delivery schedule was delayed from an initial completion date of December 2011, to December 2013. The National Energy Regulator of South Africa (Nersa) is currently investigating the cost surge.

But besides the pipeline, there are a number of other infrastructure components that are also required to secure supply and deal with the rising fuel imports, owing to the fact that there has been no increase in domestic refining capacity over the past few decades.

Inland demand has also increased from around 6.7-billion litres in 1970 to over 16-billion this year, which has placed strain on other common and proprietary infrastructure, such as fuel loading facilities, storage tanks and handling facilities.

Department of Energy director-general Nelisiwe Magubane says a road map is required to provide a framework for ensuring security of supply in the short-, medium- and long-term. She also says that such a road map will assist in determining the capabilities and capacity for local refining, storage, handling and logistics.

Work on the road map, which has been delayed by a refinery audit and constrained by inadequate data, should be finalised during the current fiscal year, which ends on March 31, 2014.

However, some projects are already moving ahead in response to some of the more obvious bottlenecks in the liquid-fuels supply chain.

For instance, independent tank storage provider Vopak, of the Netherlands, is poised to move ahead with a greenfield development near the NMPP’s Jameson Park Terminal 2, for supply and distribution into the fuel-hungry Gauteng region.

Vopak South Africa MD Erik Kleine says a 140 000 m³ facility is proposed for Phase One, comprising 12 10 000 m³ tanks and four 5 000 m³ tanks to handle diesel and petrol. There is also sufficient land available to increase the facility to 160 000 m³ during a subsequent phase.

The terminal, known as Lesedi, will include a loading gantry with capacity to load 10 trucks simultaneously, as well as rail tank cars.

The land is in the process of being purchased and the project has secured Nersa approval. An environmental record of decision is expected during the first quarter of 2014, after which construction will start. The facility should be operational by the second quarter of 2016.

In the Eastern Cape, meanwhile, a venture known as Oiltanking Grindrod Calulo is looking to develop a regional product trading hub and strategic stock storage facility at the Coega industrial development zone.

Calulo Investments’ William Kieser says the facility will cater for the needs of existing oil companies in the territory and facilitate the relocation of the existing tanks in Port Elizabeth to the Port of Ngqura.

The terminal, which will be developed in two phases, will have an ultimate capacity of 322 000 m³ and will be able to handle liquid fuels, biodiesel, liquefied petroleum gas (LPG) and heavy fuel oil.

The developers expect to receive environmental approvals for the project before the end of 2013 and to start construction by the second quarter of 2015. Testing and commissioning is scheduled for early 2017.

At a more advanced stage, is Sunrise Energy’s R1.3-billion LPG import and storage terminal, which is being developed at Saldanha Bay, in the Western Cape.

MD Barthlo Harmse says all regulatory approvals have been secured for the facility, which will be built within the bounds of an existing quarry near to the Port of Saldanha.

The first phase will comprise 5 500 t of storage, which will be provided through five mounded storage bullets. However, two further phases are envisaged to eventually raise the facility’s capacity to 16 500 t of storage, with total throughput capacity of up to 52 000 t/m.

It will be an open-access terminal, meaning that third parties will be able to use the facility for the importation and storage of LPG, and provision is being made of rail and road dispatch and direct cylinder filling.  The planned commissioning period for first phase is the second half of 2015.

Nersa’s Dr Rod Crompton says the “good news” is that South Africa is undergoing a boom in the construction of fuels infrastructure, the likes of which it has not witnessed for 40 years. “The trick is how to do it cheaper, faster and smarter so as to reduce the costs for the economy as a whole,” he adds.

Magubane has called for greater cooperation and information sharing to improve visibility of the challenges and the solutions, which range from investment in new infrastructure and refining to the integration of biofuels and reducing demand through efficiency interventions.

The key issue, she adds, is security of liquid-fuels supply, with studies showing that any unavailability will cost the economy an estimated R925-million a day, using 2005 figures.