Johannesburg - Welding and gas company Afrox will next month increase liquefied petroleum gas (LPG) imports in anticipation of higher demand this winter.
Afrox head of LPG, Mark Radford, said that as the winter chill set in, LPG usage was set to spike as households and businesses turned to gas for cooking and space heating.
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Radford said that with erratic supply from the country’s oil refineries, the increased usage often led to LPG shortages.
Afrox is among gas suppliers already battling shortages in the Western Cape.
In that province, Afrox currently relies on the more expensive imported LPG.
“As we speak, we are experiencing shortages in the Western and Eastern Cape. As from May we will import LPG in large quantities to make sure that the product is available in winter,” Radford said.
He said Gauteng was not experiencing shortages at the moment, but availability was tight. “It is not too bad.”
The increase in the use of imported LPG puts the focus on South Africa’s import and storage facilities.
Radford said the company had no choice but to use the available port facilities.
Large quantities
He said the commissioning of Sunrise Energy’s LPG import and storage facility at Saldanha Bay in the Western Cape would facilitate the importation of large quantities of LPG and alleviate shortages, especially in the Western Cape.
The Sunrise Energy project is due for commissioning in the second quarter of next year.
Sunrise Energy chief executive Pieter Coetzee yesterday said the five LPG storage bullets would be completed by the end of next month.
“The construction of the marine portion of the works have been awarded to Clough Murray & Roberts and the construction of the civil, mechanical and Electrical & instrumentation works have been awarded to WBHO, both at the beginning of February this year,” Coetzee said.
Frost & Sullivan research analyst for energy, Tilden Hellyer, said bulk importation was not necessarily where South Africa was heading at this stage.
“That being said, the Sunrise Energy LPG terminal in the Western Cape will see a capacity to import increasing, up to 210 000 tons annually in the first phase in 2017,” he said.
“Locally, South Africa produces up to 300 000 tons of LPG along with 50 000 tons being imported. With these numbers, we are locally still 40 000 tons above importation.”
Capacity
Hellyer said: “However, the project is designed in a modular way that can expand according to demand, reaching a final throughput capacity of 624 000 kilotons a year.
“How this may affect prices is uncertain at this stage, but if the already costly price of LPG increases through importation, South Africa may see companies switch to the potential natural gas economy in the Cape provinces, which may take shape after the gas to power independent power producer (IPP) programme gains traction.”
Under the proposed gas-to-power IPP programme, the government aims to procure 3 126 megawatts of gas power from the private sector.
Another Frost & Sullivan analyst, Peter Marais, said the country could build import facilities such as the Richards Bay Coal Terminal, whereby a number of companies invest in the terminal.
“Although it is an export dominated terminal, a similar structure for an import facility by all major LPG players could be set up in provinces with the biggest shortfalls,” Marais said.
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