Donwald Pressly
The national Energy Regulator of SA (Nersa) has acknowledged that the next six months would be a risky period in the transportation of fuel from Durban to Johannesburg, owing to a R1 billion shortfall on the multipurpose fuel pipeline project.
At the same time Energy Department officials were candid about uncertainty that prevailed in the procurement – by Eskom – of renewable energy from private sector producers.
Rod Crompton, a Nersa member, told the portfolio committee on energy in Parliament on Friday that the security of the inland fuel supply had entered its “riskiest” period until the end of the year because of the delay in the operation of the multipurpose pipeline (MPP). He reported that Transnet would use existing pipelines, new and old, but that the shortfall would have to be made up in transporting fuel by road and rail.
It was envisaged that the MPP would commence operation on January 1 next year with the whole project completed by April 2014, when it would reach full capacity. This year inland fuel demand was seen rising to well over 14 billion litres with supply inland expected to dip to less than 13 billion litres.
“We are now in the riskiest period to the end of December this year… until the MPP comes into operation.”
He reported that the costs of the line-fill of the three branch lines of the MPP was R108 million, which had been covered by Sasol, but he described this as a loan. The trunk link would cost about R1.1bn and it was unresolved who exactly was going to finance this project.
The worst case scenario would be that the MPP project would be finished but there was no “line fill”, which he described as similar to having a garden hosepipe with some water in and a cup at one end, but the liquid lay in the pipe without getting to the other end.
Crompton indicated to MPs on the committee, chaired by ANC MP Sisa Njikelana, that it was estimated that 68 road tankers took fuel from the coast to Gauteng daily last year, up from 47 the previous year, and this would rise to about 117 a day this year. This translated into just 12 minutes between trucks on the road this year, down from 21 minutes last year and 31 minutes in 2009. It was estimated that the transportation by road would rise from 711 million litres of fuel in 2009 to 1.7 billion litres this year.
There were construction delays in the Durban terminal and feeder lines from oil companies. He reported that Transnet would resolve this issue by “tight lining” until an accumulator facility was ready.