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OVERVIEW The oil and gas sector has been chosen by the Provincial Government of the Western Cape as one of three sectors that will drive rapid growth and create jobs. The programme to support the important sectors is called Project Khulisa and it entails detailed plans with progress reports going to the Premier on a regular basis. The Saldanha Bay Industrial Development Zone is central to the plan to grow the oil and gas sectors. Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. Considerable planning has gone into positioning the SBIDZ as a hub for a range of maritime repair activities and oil rig maintenance and repair. Saldanha has not been chosen by the national Department of Energy (DoE) to host a gas-topower plant: Richards Bay and Coega (Port Elizabeth) have instead been listed as the sites for 2000MW and 1000MW potential, if private investors for projects at those ports can be found. The Provincial Government of the Western Cape has asked the DoE to reconsider and wants Saldanha to be allocated at least 1000MW potential for private companies to consider bidding to run such a power plant. If gas was used to generate power, the next step would be for factories to consider using gas and then the whole energy mix could be changed. Another possible game changer is shale gas. The Council for Geoscience (CGS) is doing an WESTERN CAPE BUSINESS 2018

intensive study of South Africa’s potential shale gas resources. Natural gas lies offshore to the west of South Africa in the Atlantic Ocean (Ibhubesi) and off the southern coast in the Indian Ocean (Bredasdorp Basin). Both fields have great potential: Block 2A of the Ibhubesi gas field north-west of Saldanha is estimated to have reserves of 850-billion cubic feet of gas and the Bredasdorp Basin is said to have reserves of one-trillion cubic feet, but getting to the gas has proved tricky. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. Reduced global prices for oil and troubles in the container ship market has caused some stress in the local sector – DCD Marine went into voluntary business rescue in November 2016 – but the long-term prospects for shipping and oil and gas are still strong enough for national government to pursue Operation Phakisa (which includes a strong maritime economy push) and for Transnet National Ports Authority to spend heavily on upgrading the nation’s ports. Industrial gas manufacturing in the Western Cape is a particular focus for Air Products, a part of the Metkor Group controlled by Remgro. The company is the largest supplier in the pipeline and onsite markets, and it also supplies to the packaged chemicals, bulk and chemicals markets. The gas-to-liquids plant which PetroSA runs at Mossel Bay on the south coast is one of the country’s key pieces of energy infrastructure. Getting new feedstock for this plant is now an urgent priorty (and something which Project Ikhwezi was supposed to do) and a contract has been signed with a Russian firm to prospect off the coast. The Chevref oil refinery in the Cape Town suburb of Milnerton is one of six in South Africa. It produces about 110 000 barrels a day of South Africa’s total production of 703 000 barrels a day. Chevron gave notice in early 2016 of its intention of leaving South Africa. A price of R15-billion has been suggested for Chevron’s assets, which include a lubricants business and 850 Caltex petrol stations.

ONLINE RESOURCES Liquefied Petroleum Gas Association of Southern Africa: www.lpgas.co.za National Department of Energy: www.energy.gov.za National Energy Regulator of South Africa: www.nersa.org.za Petroleum Agency of South Africa: www.petroleumagencysa.com PetroSA: www.petrosa.co.za South African Oil and Gas Alliance: www.saoga.org.za Transnet Pipelines: www.transnet.net

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Western Cape Business 2018  

The 2018 edition of Western Cape Business is the 11th issue of this highly successful publication that, since its launch in 2005, has estab...

Western Cape Business 2018  

The 2018 edition of Western Cape Business is the 11th issue of this highly successful publication that, since its launch in 2005, has estab...

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