The Transnet National Ports Authority (TNPA) has signed a 25-year Terminal Operator Agreement with WASAA CEF SOC Ltd to develop and operate a new liquefied petroleum gas terminal at the Port of Durban’s Island View Precinct.
With an investment value of approximately R1.4 billion, the execution of the project is crucial for advancing South Africa’s Just Energy Transition programme, which aims to shift the gas sector from fossil fuels to cleaner energies whilst supporting the decarbonisation of key sectors.
Speaking at the signing ceremony held at the Port of Durban LPG Terminal on Friday, TNPA Board Chairperson Tshokolo Nchocho said the agreement formed part of the developmental mandate of transforming the South African ports system by creating opportunities that will translate into the economic growth of the country.
“In keeping with this mandate and the concession framework stipulated in Section 56 of the Ports Act, we are here today to celebrate a milestone of great significance,” Nchocho said.
In July 2024 TNPA issued an award letter for a 25-year concession for the design, development, financing, construction, operation, maintenance and transfer of a Liquefied Petroleum Gas (LPG) terminal in the Island View precinct of the port.
“A rigorous journey has brought us to this long-awaited and proud moment. I am immensely proud of the teams that have contributed their expertise to this transaction.
“Today is a clear reflection of TNPA’s strategic direction as we work to transform and modernise our port system, unlock infrastructure investment and support South Africa’s evolving energy and logistics landscape.
“This Terminal Operator Agreement represents a partnership that is aligned with national priorities, market demand and global energy dynamics. The development of the first LPG terminal in the Port of Durban is a timely and necessary response to where the world is moving,” Nchocho said.
The signing of the agreement reflects TNPA’s commitment to ensuring that Durban remains competitive, efficient and ready to attract future investment.
“The WASAA CEF Joint Venture brings together a level 1 black-owned and black-women-led entity with a national energy institution that carries a mandate to support security of supply and long-term energy development.
“This is transformation that is grounded in capacity, performance and in a vision for expanding South Africa’s strategic role in the regional energy market. It is the type of collaboration we want to see driving future concessions and infrastructure development across the port system.
“This agreement further demonstrates the value of a transparent, competitive and well-governed Section 56 process,” he said.
Advocate Michelle Phillips, Transnet Group Chief Executive, said the signing ceremony between TNPA and the Preferred Bidder comes at a time when the country is implementing strategies to ensure the Just Energy Transition, which is a framework that guides the transition of the economy from fossil fuels to cleaner energies and accelerate the decarbonisation of key sectors.
“At Transnet, we have been very clear about the direction in which we are steering the organisation. We are building a business that is stronger, more resilient, and fundamentally more capable of supporting national growth,” Phillips said.
Phillips said TNPA’s goal is to rebuild trust in its operations, attract investment and develop partnerships that will introduce new capacity and expertise into the logistics system.
“This new agreement reflects exactly the type of partnership we envision for the future. It brings together an experienced state-owned energy company and an emerging transformation-driven operator, both committed to delivering value at the highest standard,” she said.
eThekwini Mayor, Cyril Xaba, in his message of support congratulated TNPA and the WASAA CEF SOC LTD Joint Venture on reaching this significant milestone.
“For us as a city, this is a welcome development, as it will greatly enhance Durban’s position as a leading energy and logistics hub. It will also boost our economy and create much-needed jobs,” Xaba said.
He said he has no doubt that the development of the first-ever LPG gas terminal in the Port of Durban will support the city’s Climate Action Plan by reducing carbon emissions, an essential component to climate change.
“This project will also help us accelerate our programme to develop new electricity generation capacity. As you know, the Minister of Electricity and Energy has authorised the city to procure 400 megawatts of renewable energy from Independent Power Producers.
“This includes 300 megawatts of gas-to-power and 100 megawatts of solar PV. Therefore, the timing of this project could not be more fitting,” the Mayor said.
Xaba said the city remains committed to working with Transnet, particularly TNPA, to unlock the full potential of the Port of Durban.
The construction of the LPG terminal in Island View, which will be known as LOT 100 Terminal, follows the company’s procurement of bp Southern Africa’s liquid bulk fuels import terminal in East London in 2022 which considerably entrenched WASAA’s position as an emerging commodity trader in the sub-Saharan region where it has regularly supplied LPG for over 10 years.
The East London terminal serves key customers such as Shell, bp, and Engen and boasts 55 million litres of operational storage capacity.
The construction and operation of the LPG terminal in Island View is expected to diversify the ports of entry for LPG imports into South Africa which are currently limited to Richards Bay, Saldanha Bay, and Port Elizabeth. The three ports collectively account for 97% of all imports coming into South Africa between 2010 and 2022.
Once operational, the Port of Durban terminal will also reinforce the port’s status as a major hub for the SADC region and a key transhipment point connecting global markets.
The agreement supports Transnet’s Reinvent for Growth strategy, which focuses on transforming the business through strategic partnerships and leveraging collaboration between public and private sectors to meet growing market demand.
It follows a successful competitive bidding process under Section 56 of the National Ports Act No 12 of 2005, which led to TNPA appointing WASAA Gases and Central Energy Fund Joint Venture (JV) as a preferred bidder. The JV will develop, construct, operate, maintain and transfer the LPG terminal at the Port of Durban.
The agreement will result in a 50 000 m³ liquefied petroleum gas (LPG) terminal storage and handling capacity, a comprehensive solution addressing the growing demand, particularly in KwaZulu-Natal and the Eastern Cape hinterlands.
The terminal, which is expected to be completed by 2027, will have capacity to dispatch up to 800m³ per hour of heated LPG mix. This, according to TNPA, will provide essential supplies to various industrial markets and produce specific grades suitable for residential use.
Women participation
Nokwande Qonde, founder and Managing Director of WASSA, told SAnews that the signing ceremony not only marks an important turning point for the company, but also carves a path for the meaningful participation of women in the oil and gas sector.
“I strongly believe that having women playing a key-role in the industry cannot continue to be an aberration, we need to be intentional about dismantling the age-old, patriarchal, and exclusionary culture that views female entrants as an anomaly at best, and intrusive at worst,” she said.
Qonde said it’s worth noting that LPG is being widely used for large-scale power generation in other parts of the world, especially in remote areas and developing regions which are unable to connect to the natural gas network.
“Through this signed 25-year concession agreement, the Port of Durban will enhance its strategic position as a key national logistics hub.
“The terminal will not only benefit the local economy, but it will also enable access to clean energy and help reduce carbon emissions in the energy sector,” said TNPA Acting Chief Executive, Mohammed Abdool. – SAnews.gov.za
