Petroleum sector brings hope to province

Johannesburg - Somewhere in a windswept corner of Saldanha, on the west coast, a monstrous structure that doesn’t quite fit into the surrounding topography is rising.

From a distance it is not elegant at all.

In fact, it looks like a cross between a space station and a Gauteng mine dune. Well, if it is not pretty, that’s because it is not meant to be.

“The beauty is on the inside”, as those who would not qualify for a beauty pageant are prone to saying.

The structure in question is the soon-to-be-completed liquefied petroleum gas (LPG) terminal.

Its owners are hoping it will have a major effect on the Western Cape’s household and industrial energy needs and influence South Africa’s energy mix conversation.

Sunrise Energy, a subsidiary of Royal Bafokeng Holdings, is behind the R1.2 billion project and says its impact will be felt beyond South Africa’s borders.

Botswana and Namibia have already indicated they will source LGP from the plant, with the former planning to use it to power some its electricity generation plants.

The motivation for initiating the project was the persistent LPG shortages in the Western Cape.

The province’s refineries currently provide only between 4 000 and 5 000 megatons of the 11 000 megatons that the Western Cape market consumes monthly.

The rest has to be trucked in from up-country.

This has resulted in persistent shortfalls in winter as demand goes up throughout the country and puts pressure on competing needs.

When the plant goes on stream in May, it will not only meet the demand, but will also be used as a springboard to increase the use of LPG as a substitute for electricity.

Consumers will include households, commercial buildings and the manufacturing industry.

Steel producers have indicated they want to reduce their dependence on Eskom, and plan to switch to LPG.

Sunrise Energy CEO Pieter Coetzee argues that since LPG is much more cost-effective and environmentally friendly than coal-generated electricity, it should be a no-brainer for South Africa to be growing this market more aggressively than it is for the 7kg per capita amount used annually.

Some of South Africa’s peers are already far ahead of us in this regard. For instance, Argentina consumes nearly 50kg per capita annually, and Brazil about 40kg.

Developing world giants India and China, which are also world champions at polluting the environment, consume just a little more than we do – India’s measure is 10kg and China’s is about 15kg.

Coetzee, a veteran of the Central Energy Fund and Strategic Fuel Fund, believes a stronger focus on LPG will make a massive difference to South Africa’s coal-dominated power generation.

The entire sea-to-land project is an engineering geek’s wet dream. It consists of a 3.2km long undersea pipeline that will draw the product from a ship.

It will then be fed into another pipe that will snake through the seaside fynbos territory to the facility where the refining will happen.

The facility itself is a complex web of piping, technology and funny words that are enough to make you dizzy.

From the engineers and the welders to the project managers and the divers who have to risk confrontation with killer whales as they lay down the undersea cables, there is a buzz as the monstrous project takes shape.

Naturally, it has worked wonders for Saldanha’s economy.

About 500 local jobs, which were created in the construction phase, are set to spawn thousands more downstream when the project is up and running.

Already, house prices are on the up as speculators look ahead to the next two phases of the project and the satellite business they will support.

And, about 1 500km away, in the North West, Bafokeng villagers are already counting revenues that will accrue.

An aerial view of the R1.2bn liquefied petroleum gas structure being built at Saldanha.

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