Avedia Energy soon ready to supply LPG to local market

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This follows a landmark decision by the Ports Regulator of South Africa to overturn a concession granted to Sunrise Energy by the Transnet National Ports Authority (TNPA) to construct an LPG import terminal and storage facility in Saldanha.

Following an appeal to the Ports Regulator by Avedia Energy, the Regulator found last month that the concession to Sunrise Energy - which had also planned to build an LPG marine pipeline - was contrary to the National Ports Act and the Petroleum Pipelines Act.

The Regulator determined that the land on which the terminal was to be constructed is located outside the Saldanha port boundary and therefore beyond the jurisdiction of the TNPA, and the concession granted an exclusive right to one market player to use port infrastructure.

Victory for SA

Avedia Energy managing director, Atose Aguele, welcomed the decision by the Ports Regulator, saying it was a victory for South Africa. "Every winter, South Africa is hit by severe LPG shortages, which increases pressure on the Eskom grid. A consistent, cost-effective supply of LPG can only be guaranteed through an urgent investment in our country's LPG import, handling and storage facilities, and we are investing around R300m in constructing such a facility in Saldanha. The creation by the TNPA of a monopolistic position intentionally or unintentionally through conferring exclusive rights to one port user is not in the public interest."

Avedia's appeal to the Ports Regulator had been to ensure that our company's considerable investment is not jeopardised by an illegal concession being used as a stranglehold to the import of LPG by third parties, Aguele said. Avedia would also have made use of the LPG pipeline as part of the TNPA's port offloading infrastructure and facilities. "We are confident that the TNPA will make an announcement shortly on the provision of port infrastructure at Saldanha to secure the supply of LPG into South Africa."

Aguele said Avedia's dedicated terminal, due for completion in six months, would be the largest LPG import storage facility in South Africa. "The envisaged facility will provide an overall storage capacity of 8,000MT in its final phase, which will boost the existing import LPG storage capacity in South Africa by at least 80%."

Handicapped infrastructure

The Western Cape counts as the second largest consumer of LPG in South Africa. Of the annual 380,000MT LPG consumption in South Africa, some 120,000MT of LPG is being utilised by Western Cape users, with the bulk of industrial LPG users located in a 5km radius of the Saldanha port.

"The current LPG shortfall and erratic production of LPG in South Africa is exacerbated by the country's handicapped LPG storage and transport infrastructure. This means that South Africans are simply not able to consider LPG as a reliable and cost-effective energy alternative," Aguele said.

Through Avedia's entry into the South African LPG market, and the company's ongoing commitment to continuous gas supply and infrastructure investment, it hoped to make significant inroads in terms of stabilising the local LPG industry.