Transvet seals Port of Ngqura LNG deal

You can also listen to this podcast on iono.fm here.

JIMMY MOYAHA: The Transnet National Ports Authority [TNPA] today signed a landmark 25-year terminal operator agreement for the development of an onshore liquefied natural gas [LNG] regasification facility in the Eastern Cape. We’re going to be looking at this landmark agreement and what it means for South Africa’s energy mix conversations.

I’m joined on the line by Dr Dineo Mazibuko, general manager for commercial services at Transnet National Ports Authority to see if we can make sense of this.

Dr Mazibuko, lovely having you on the show. Thanks so much for taking the time. Certainly a significant moment for the South African energy mix conversation, but a significant moment for Transnet Ports Authority as well.

DR DINEO MAZIBUKO: Thank you, Jimmy, and I appreciate you having me. Indeed, it was a significant moment at TNPA today as we were signing the second LNG port terminal [operator agreement] within our South African ports system with Ukwanda LNG, a joint venture between Tamasa Energy Group and the [state-owned] Strategic Fuel Fund which is obviously looking at reshaping South Africa’s energy and maritime logistic landscape.

Here, Jimmy, we are looking at the terminal operator, which is going to design, develop, finance, construct and operate an LNG terminal over a concession period of 25 years at the Port of Coega.

ADVERTISEMENT

CONTINUE READING BELOW

JIMMY MOYAHA: Dr Mazibuko, would this project follow some of the other projects we’ve been seeing of late around the ‘build, operate and then transfer’ models between the public and private sector? We’ve recently seen Transnet [is] not the only state-owned entity that has opted to start to incorporate these kinds of models. Is that what we’re looking at here for this particular project?

DR DINEO MAZIBUKO: Indeed. We are looking at the private sector coming [in], and obviously on our side as the TNPA we will be responsible for constructing a berth where the vessels come and drop the [goods]. And the terminal operator, Ukwanda, which is a private sector operator, is coming obviously to construct an LNG storage facility, including deployment of a temporary floating unit to ensure that we are able to move the LNG across the quay within our ports, and then to the land side so that it gets to the final destination where it needs to go.

It is part of the private-sector participation that we are advocating within the TNPA.

JIMMY MOYAHA: Dr Mazibuko, I want to look at a similar project that we discussed quite a couple of years ago. As South Africa we were looking at PetroSA potentially looking at a LNG facility in Mossel Bay with very similar storage and re-gasification setups. Is this type of project now going to be the lead project from a Transnet perspective? Are we expecting that there will be an engagement of a similar nature with the likes of PetroSA for more of these sorts of facilities, or are we looking to say let’s get this one off the ground first and then those conversations might follow?

DR DINEO MAZIBUKO: Jimmy, TNPA has positioned about three ports for LNG in the South African port system. The first is the port of Richards Bay, and that is where we signed the first terminal operator agreement for LNG with a joint venture between Vopak South Africa and Transnet Pipelines.

This [Coega] is the second one that we are looking at concluding, and I must indicate that the joint partners that are coming here [are] between Tamasa Energy Group and the Strategic Fuel Fund; the Strategic Fuel Fund is part of the first group, which is a company associated with PetroSA.

So there are collaborations that are happening with state-owned companies to ensure that this market grows in South Africa.

ADVERTISEMENT:

CONTINUE READING BELOW

JIMMY MOYAHA: Dr Mazibuko, can we look at that growth and the impact we’re anticipating from this project now? With projects of this nature there are often jobs created during the construction period, during the operational and maintenance periods of these operations.

But, beyond that, we’re looking at effectively creating a new ecosystem and allowing South Africa to tap into an entirely new market in regasification of liquefied natural gas. That certainly will have more of a ripple impact than just the initial jobs we’re talking about here.

DR DINEO MAZIBUKO: Yes, indeed. I can just start by indicating that we’re looking at an investment value of approximately R22 billion, of which TNPA as well will contribute about R2 billion in terms of the berth that it is required to construct. During the construction phase we are looking at about 500 jobs being created. Then obviously, after the completion of the facility, we’re looking at having about 50 permanent jobs that are going to be sustained over a period of 25 years.

JIMMY MOYAHA: Dr Mzibuko, when do we expect to reach full operationalisation of the project?

DR DINEO MAZIBUKO: The project is in two phases. First, we are looking at deploying a temporary floating unit, which is going to help, obviously, facilitate the transfer of reclassified LNG – from the floating vessel that we’re going to have, to the terminal. That period is meant to be for about five years, starting from around 2030/31.

And then, after the temporary floating unit and the berth have been constructed, we will be looking at developing this onshore terminal – and we are looking at ensuring that it will be operationalised by 2035.

But we are going to start seeing the volumes coming through from 2031, 2032, through the floating unit, temporary floating unit.

ADVERTISEMENT:

CONTINUE READING BELOW

JIMMY MOYAHA: Dr Mazibuko, before I let you go, I want to look at the impact this will have on the South African economy. We know that from our own perspective this type of project and this type of facility will start to allow South Africa to leverage off a gas-to-power pipeline, which would then filter into our ongoing power needs as a country.

I want to look at that particularly in the context of something like the Coega special economic zone [SEZ] where we’re looking to have increased partnerships in that particular economic zone, and how this project then feeds into that economic zone.

DR DINEO MAZIBUKO: Okay, let me start by saying the project obviously aims to deliver LNG to the South African market as an alternative energy source, and it’s in line with the Integrated Resource Plan. It is a direct response to South Africa’s Just Energy Transition programme, which is obviously set to unlock the 6 000 MW gas-to-power pipeline.

We are obviously working together with the Coega zone. For example, within the first phase, when this cargo is being delivered through the FSRU (Floating Storage and Regasification Unit), it will then be pumped across to Coega where there will be a land unit where it is going to be stored. So there is a joint collaboration between the two parties.

JIMMY MOYAHA: The move by the Transnet National Ports Authority to enter into a 25-year operational agreement for the development of an onshore liquefied natural gas facility in the Eastern Cape is certainly a sign that South Africa continues with its Just Energy Transition initiatives, ensuring that the energy security mix of South Africa continues to be met.

We’ll leave the conversation on that note. Thanks so much to the general manager for commercial services at Transnet National Ports Authority, Dr Dineo Mazibuko, for joining us to take a look at the significant agreement signed between Transnet and the private sector to establish a new liquefied natural gas regasification facility in South Africa.

#Transvet #seals #Port #Ngqura #LNG #deal