R1bn Ngqura liquid bulk terminal project hits the skids

26 February 2020 | Web Article Number: ME202018209

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WORK on the long-awaited Liquid Bulk Terminal in the Port of Ngqura has stalled, Oiltanking Grindrod Calulo has announced. It cited “Insufficient customer commitment” as the reason for the R1-billlion development grinding to a halt.

OTGC was awarded the preferred bidder status in 2011 by Transnet National Ports Authority (TNPA) to develop a liquid bulk storage terminal in the Port of Ngqura to service fuel importers in the Nelson Mandela Bay region. The facility was intended to replace the existing terminal in Port Elizabeth.

But that’s now in doubt following the shock announcement from OTGC.

“To date, OTGC has not been able to secure sufficient customer commitment for the project. OTGC is therefore in a regrettable position that it is unable to execute on the project and is liaising with TNPA on the way forward,” the company said in a statement.

OTGC is a joint venture between operating partner Oiltanking GmbH, a German multinational that is one of the largest independent operators of tank terminals for oils, gases and chemicals worldwide, and local partners Grindrod Limited, a JSE listed Freight and Financial Services company, Calulo Investments (Pty) Ltd, a diversified BBBEE investor in the petrochemical industry and Adopt-a-School Foundation, a non-profit organisation which supports education in disadvantaged schools.

Since the date of award, OTGC has been engaged in negotiating the build, own, operate and transfer (BOOT) agreement, engineering design of the terminal, obtaining commercial commitments from customers, negotiating funding with lenders, and obtaining the required regulatory permits for the construction of the project.

Construction of the terminal commenced in 2019 with the earthworks now complete.

It is unclear at this stage how the project’s stalling will affect the planned decommissioning and rehabilitation of the existing liquid bulk facilities at the neighboring Port of Port Elizabeth.

The new tank farm was expected to provide storage and marine infrastructure to support the overall petroleum demand projections for South Africa. Last year’s sod-turning ceremony was attended by oil industry principals and government officials who were told it would pave the way for Ngqura’s establishment as a new petroleum trading hub for southern Africa.

TNPA had not commented at the time of publishing.

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