Eskom’s woes blamed for high gas demand
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Cape Town - High demand during winter, load-shedding, high electricity costs, maintenance shutdowns at refineries and delays in building sufficient gas storage facilities are the reasons for the Western Cape’s shortage of Liquefied Petroleum Gas (LPG), say experts.
Avhapfani Tshifularo, executive director of the South African Petroleum Industry Association (Sapia), said in a statement that the increase in demand for LPG in the winter months has been driven by increased electricity prices, as consumers use it as an alternative source for heating.
Tshifularo said the association’s members supply the majority of LPG distributed in South Africa, which is sold directly to independent wholesalers, who then market and distribute the product in bulk or in cylinders to customers.
“During the winter months when there is an increase in demand for LPG, both wholesalers and distributors have the ability to import additional LPG to meet customers’ requirements.
“In view of the predicted demand levels, independent terminal operators are developing an LPG Import Terminal in Saldanha Bay, which will facilitate the importing of additional LPG to meet local demand and this facility is expected to be operational towards the end of next year.”
Dr Rod Crompton, regulator member responsible for petroleum pipelines at the National Energy Regulator of South Africa (Nersa) said the consumption of LPG in
South Africa will quadruple between 2012 and 2024.
He said the demand for LPG in the Western Cape was 23 percent (90 620 tons a year) of national demand and has fluctuated between 109 000 tons a year in 2003 and 89 000 tons in 2012.
Afrox spokesman Simon Miller said supplies of LPG remained constrained in the Western Cape and across the country.
He said the Western Cape remained the hardest hit due to problems such as the maintenance shutdown earlier this year at the local refinery.
“I believe the Engen refinery has restarted operations a week earlier than scheduled and this should provide some relief to consumers, but the shortage of LPG is not over.
“Afrox has on average imported 6 000 tonnes a month of LPG since the beginning of winter but this is far from enough to meet the demands of consumers, the hospitality industry and industrial customers .
“Afrox, however, has done everything possible to ensure each market we serve gets some supplies of LPG, although not their full allocations in some instances,” Miller said.
Janine Myburgh, president of the Cape Chamber of Commerce and Industry, said the shortage of gas was predictable and it was shocking that not enough was done to fast-track the importance of LPG.
“Encouraging the use of gas is one of the best ways to deal with the peak-hour demand for electricity and it is the peak-hour demand that causes all the problems.”
She added that import facilities were inadequate and there had been long and unnecessary delays in building a big new terminal in Saldanha Bay.
“The problem is that businesses now have to find ways to use less gas and that will probably mean less production and perhaps even fewer jobs. It could all have been avoided with a little planning and a sense of urgency.”
Coenraad Bezuidenhout, executive director of Manufacturing Circle, a representative of the Gas Users Group, said: “With a lack of security of electricity supply still to be with us for some time to come, many manufacturers have turned to renewables and gas to bring security to their energy mix and even out strained supply.
“It is therefore crucial that the gas supply insecurities in Cape Town over the winter months are addressed.”
Kevin Robertson, chief executive of the LPGas Safety Association of South Africa, said the current shortage was caused by the planned maintenance undertaken at various refineries which required them to be shut down for a period of time.
The problem was compounded if the start-up date was exceeded or if the refinery did not operate correctly. When all supply companies are forced to collect from a limited number of refineries, this can also cause extended delays as they wait in line to have their vehicles filled, again causing additional delays.
“A further problem is a lack of import and storage facilities without which it is not possible to import and store product in commercially viable volumes.”
Some members of the Federated Hospitality Association of South Africa said in a response to the shortage, that the problem was pronounced in the Garden Route.
Some members had known about the coming shortage and had ordered additional stock. Others made alternative arrangements.
The members said the impact on revenue was not great as there was limited load-shedding, but it would be felt if the gas shortage or extended load shedding continued for a longer period.