Oil & Gas

The western cape is well placed to position itself as a major hub for the oil and gas industries. New gas prospects on the west and south coasts are being explored and the region is marketing itself as a support and services hub to the oilfields of Nigeria and Angola.

Significant amounts of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s and 23.7% of oil emanating from the Middle East. The ports of Saldanha and Cape Town are well equipped to deal with this traffic while the Port of Mossel Bay acts as a service hub for the regional gas industry.

The Cape Town suburb of Milnerton is host to one of South Africa’s four oil refineries, Chevron Refinery. The plant produces products such as jet fuel, bitumen, sulphur and paraffin and employs 330 people. In 2000, nearly R1-billion was spent on lowering the sulphur content in diesel and fuel oil, and cracking capacity was increased.

Saldanha is the site of the country’s largest oil-storage facility. PetroSA maintain six tanks, each of which has a capacity of 1.19 million cubic metres. The total strategic reserve kept on-site is about 7.2 million cubic metres, or 45 million barrels.

PetroSA’s gas-to-liquid (GTL) refinery in Mossel Bay is the country’s leading gas facility. It has a capacity of 36 000 barrels per day (bbl/d) which is the equivalent of 45 000 barrels of crude oil per day.

In terms of new gas fields, PetroSA has a 35% stake in prospecting rights in the Bredasdorp Basin off the South Coast which it is looking to farm out. Altogether the company is committed to spending R5-billion on finding new gas sources.

Plans are in place for the possibility of not finding significant new reserves. Steps are being taken to import gas in order to keep the refinery running at optimum capacity. Studies are under way to find the best onshore site for a loading facility.

A 225km pipeline is planned as part of a project to transport natural gas from the Kudu gas field off the coast of Namibia to greater Cape Town. The energy company Gigajoule announced in June 2009 that it intends to spend R2.5-billion on piping about 40 million gigajoules of natural gas along this route by the year 2015. The target market is industrial concerns located in Saldanha, Atlantis and Cape Town.

Servicing the oil industry
The emergence of Angola as a major player in the international oil industry has created opportunities for the Western Cape. Companies in the service and supply industries have already started making inroads into the Nigerian market and prospects are good for growing this sector.

A major step towards this objective was achieved when MAN Ferrostaal invested some R1.7-billion in 2006 to create fabrication and repair facilities for oil tankers and drilling platforms at Saldanha, and a refurbishment hub in the Port of Cape Town. Being able to source platforms from an African port will mean a significant cost-saving for companies operating off the coast of Africa.

Western Cape investment-promotion agency Wesgro has emphasised the potential market for South African companies in the field of training in the oil industry. Other areas where a good market exists are in the supply of fire-fighting equipment, drilling supplies and materialshandling equipment.

ONLINE RESOURCES
Liquefied Petroleum Gas Safety Association of Southern Africa: www.lpgas.co.za National Department of Energy: www.dme.gov.za
National Energy Regulator of South Africa: www.nersa.org.za
PetroSA: www.petrosa.co.za
South African Oil and Gas Alliance: www.offshoreafrica.co.za