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Africa|Pipelines|Refinery|Transnet
Africa|Pipelines|Refinery|Transnet
africa|pipelines|refinery|transnet

Transnet to appeal order to pay billions in damages following long-running Natref dispute

20th June 2024

By: Terence Creamer

Creamer Media Editor

     

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The High Court has found in favour of Sasol Oil and TotalEnergies in relation to a long-running dispute with Transnet over pipeline tariffs from Durban to the Natref refinery and has awarded damages and interest to the two oil companies amounting to more than R8-billion.

Transnet expressed disappointment at the judgment, which it said it intended appealing.

In 2017, Sasol Oil followed TotalEnergies in instituting legal action against Transnet, whose Transnet Pipelines unit transports crude oil from Durban to the Natref crude oil refinery located in Sasolburg, in which Sasol Oil and TotalEnergies held 63.64% and 36.36% respectively.

The oil majors claimed damages arising from Transnet's alleged breach, over a number of years, of an obligation to set pipeline tariffs for conveyance of crude oil in terms of an agreement that had been entered into between the parties in 1991.

The agreement had since been cancelled, but involved calculating the tariff from Durban to the Natref refinery using a “neutrality principle” in terms of which Natref would neither be advantaged nor disadvantaged by its inland location.

“The litigation between the parties has been ongoing for years and a number of issues in the matter have been determined by the High Court, Supreme Court of Appeal and Constitutional Court respectively," Sasol told shareholders in a statement.

The JSE-listed group added that the remaining issues in the litigation proceeded to trial in the High Court of South Africa from April 15 to 3 May 3 and that, on June 18, judgment was handed down by the High Court in Sasol Oil and TotalEnergies' favour.

“Damages in the amount of R3.8-billion plus interest amounting to approximately R2.3-billion were awarded to Sasol Oil,” Sasol said in the statement.

TotalEnergies, meanwhile, was awarded damages of R2.1-billion, as well as interest on various amounts adjudicated by the court.

Transnet said the judgment had enormous implications not only for the public purse but also for Transnet’s ability to discharge its obligations under the applicable legislation and its licence conditions.

"Transnet intends to appeal the judgment and is in the process of instructing its legal team accordingly."

Edited by Creamer Media Reporter

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