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HomeTradeInvestAfricaInvest DurbanOil and gas sector investment in KwaZulu-Natal progressing steadily

Oil and gas sector investment in KwaZulu-Natal progressing steadily

An allocation of 3 126MW to natural gas has been made in the national medium-term energy policy to 2030.

The National Energy Regulator of South Africa (Nersa) has approved an application from national utility Eskom to build a 3 000MW gas power station in Richards Bay.

Richards Bay will host a gas power plant

An allocation of 3 126MW to natural gas has been made in the national medium-term energy policy to 2030. The National Department of Mineral Resources and Energy allocated one of the first two gas-to-power plants to be constructed under the Independent Power Producer Procurement Programme (IPPPP) to Richards Bay, pictured above.

This has the potential to turn the Richards Bay Industrial Development Zone (RBIDZ) into an energy hub.

Environmental groups have lodged appeals in an attempt to stop the building of the plant, which is a step along the pathway outlined by national government to use gas as a “transitional fuel”, away from fossil fuels towards greener sources of power.

Infrastructure

The Port of Richards Bay is investing in new infrastructure. The supply of liquid petroleum gas (LPG) is set to be made much easier and more reliable with the erection of the 22 600-ton Mounded LPG Facility at Richards Bay.

In reaction to the announcement in 2022 by Shell Downstream South Africa and bp Southern Africa of a “spend freeze” and a pause in operations at the SAPREF oil refinery in Durban, the Provincial Government of KwaZulu-Natal intends facilitating meetings with these companies and other interested parties to try to find a way to restart operations at this important facility. The refinery accounts for roughly 35% of the country’s refinery capacity and is likely to be offered for sale.

Durban’s other oil refinery, Enref, was hit by a fire in December 2020 and there are plans to convert it to a storage facility. South Africa is a net importer of fuel and the Port of Durban handles 80% of South Africa’s fuel imports.

The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbed-methane gas exploration rights in KwaZulu-Natal to NT Energy Africa, which has a partnership with the Central Energy Fund. These awards are for onshore exploration. Petroleum Agency SA is an agency of the National Department of Mineral Resources and Energy (DMRE).

Eni, one of the world’s biggest energy companies, has an agreement with Sasol Petroleum International to explore for hydrocarbons off the coast of KwaZulu-Natal.

Getting fuel to the province of Gauteng is the key mission of the new multi-purpose pipeline (NMPP). Refined products such as jet fuel, sulphur diesel and both kinds of octane petrol are carried. The infrastructure of Transnet Pipelines is said to reduce the number of fuel tankers on South African roads by about 60%.

Investment opportunities in Durban

Contact Invest Durban to discuss investment opportunities in the oil and gas sector in KwaZulu-Natal:


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