Port of East London to expand its petroleum footprint

Aerial view of East London Harbour, South Africa

Port of East London’s plans to recommission an existing tank in the port for handling of liquid bulk and to introduce a liquid bulk terminal through a 25-year port concession has received interest from 97 companies. The concession is planned to be awarded to a private, empowered entity.

The request for proposal (RFP) is targeted at a new entrant or consortium which must have a minimum of Level 4 BBBEE status, is at least 51% South African Black Owned, at least 51% new port entrant owned and at most 49% owned by cargo interest. The RFP deadline is 1 November 2018.

The operator will be procured through a Section 56 market approach, which sees TNPA – as landlord and ports master planner mandated by Section 56 of the National Ports Act – entering into contracts with private terminal operators to design, construct, rehabilitate, develop, finance, maintain, operate and transfer port terminals or facilities back to the Authority. In terms of S56(5), an agreement may only be entered into by the Authority in accordance with “a procedure that is fair, equitable, transparent, competitive and cost-effective”.

Four oil majors presently operate in the Port of East London with products including unleaded petrol (ULP), automotive diesel, kerosene (paraffin) and aviation fuel. Overall capacity is 3 million kilolitres.

The existing tank on the port’s West Bank proposed for HFO operations was commissioned in 1977 and has a working capacity of 7.6 million litres. It is envisaged that the liquid bulk terminal will be developed from its existing 8 000m2 footprint to 21 000 m2 and that the operator would use the port’s existing tanker berth.

The national demand forecast for petrol, diesel and jet fuel is expected to grow from 29.9 billion litres to 83 billion litres for the period 2015 to 2044. The demand includes South Africa, Botswana, Lesotho, Namibia, Swaziland and exports to markets in Southern Africa hence TNPA is creating capacity ahead of demand.

This initiative joins several concessions awarded by TNPA across eight commercial ports in South Africa and aim to open up participation in port activities by businesses owned by historically disadvantaged individuals, small to medium sized BBBEE companies, and creating sustainable jobs and skills development.

Source: TNPA