Energy firm ST Energies has invested into a supply and storage contract with the Matola region, in Mozambique, to embed diverse energy supply chains in South Africa, supporting existing regional supply chains to help South Africa mitigate its over-reliance on domestic demand from the Port of Durban.
The company initiated and concluded negotiations for this supply and storage contract, ensuring there is a sustainable supply of fuel critical to the country and the local energy sector.
ST Energies notes that South African refinery production faces significant challenges in terms of security, supply and logistics, while the existing refinery market's facing deficits and limitations in supply and capacity has meant that the economics do not work.
As such, most of the supply is being imported into Durban, which ST Energies says is “not ideal”, especially considering the civil unrest in 2021.
ST Energies negotiated this supply and storage deal to ensure operations were in place prior to the upcoming refinery shutdowns expected in South Africa by the end of 2023.
With this deal in place, ST Energies says South Africa is “assured of a consistent supply of resources” that will help overcome the growing challenges of deteriorating supply chains and the current over-reliance on Durban port.
This investment is intended to ensure that South Africa receives a consistent supply of energy well into the future, and that systems and processes are put in place before refinery closures and supply chain complexities start to impact business and production.