A unit of Bidvest Group, South Africa’s Bidvest Tank Terminals (BTT), and liquefied petroleum gas (LPG) firm Petredec, unveiled the construction of a $70 million LPG import and storage facility in Richards Bay, north of Durban.
In a joint statement, BTT and Petredec said the 22,600 tonne facility will significantly increase the supply of LPG to South Africa and allow for exports of the fuel to neighbouring countries. As a result of constrained domestic supply and a lack of sufficient import and storage capacity, the South African per capita usage of LPG is lower than in many equivalent economies, even when it is preferable to paraffin or wood as fuel for heating and cooking.
According to Petredec’s Director, Lee Furby, Petredec’s ships, which trade, transport, store and distribute LPG to industrial, commercial and domestic users, have had to incur costs while parking outside the harbour for months, because of the lack of sufficient storage facilities in South Africa.
Furby said “there will be huge efficiencies when this terminal opens, not only for us but also for the end users”.
Petredec provides most of South Africa’s imported LPG. The country uses about 400,000 tonnes of LPG annually. The facility is expected to increase this by 200,000 tonnes a year.
BTT’s Managing Director, David Leisegang said “an increased LPG supply will result in the fuel becoming a significant alternative to South Africa’s current energy supply, with little additional infrastructure required”.
The four 5,650 tonne tanks to be used in the facility, have a concrete case surrounding the cylinder and will be made in China. The tanks are expected to be completed by April 2019 and the facility will be operational in 2020.
South Africa’s Competition Commission revealed that industrial or commercial users of LPG in South Africa account for approximately 85 percent of consumption, while domestic or household users consume the remaining 15 percent.