Bidvest unit, Petredec unveil construction of R1bn LPG site

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IOL Business Report

South Africa’s Bidvest Tank Terminals (BTT), a unit of Bidvest Group and liquefied petroleum gas (LPG) firm Petredec on Thursday launched the construction of a R1 billion LPG import and storage facility in Richards Bay, north of Durban.

The 22 600 ton facility will significantly increase the supply of LPG to Africa’s most industrialised economy and allow for exports of the fuel to neighbouring countries, the companies said in a joint statement.

Although LPG is preferable to paraffin or wood as fuel for heating and cooking, the South African per capita usage of LPG is lower than in many equivalent economies as a result of constrained domestic supply and a lack of sufficient import and storage capacity.

The lack of sufficient storage facilities in the country has meant that Petredec’s ships, which trade, transport, store and distribute LPG to industrial, commercial and domestic users, have had to park outside the harbour for months, while incurring costs, the firm’s Director Lee Furby told Reuters.

“There will be huge efficiencies when this terminal opens, not only for us but also for the end users,” Furby said.

Petredec supplies most of South Africa’s imported LPG.

The country uses about 400 000 tons of LPG annually. The facility is expected to increase this by 200 000 tons a year.

“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,” BTT’s Managing Director David Leisegang said.

The four 5 650 ton tanks that have a concrete case surrounding the cylinder will be made in China, and are expected to be completed in April. The facility will be operational in 2020.

South Africa is diversifying its energy mix and reducing reliance on coal, which accounts for over 85 percent of its power.

According to the Competition Commission, 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.

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