Transnet taps Dutch-based Vopak as preferred bidder for Richards Bay LNG terminal

This week, Transnet National Ports Authority (TNPA) announced the Dutch-based Vopak Terminal Durban and Transnet Pipelines consortium as the preferred bidder to develop and operate a liquefied natural gas (LNG) terminal at Richards Bay.

The LNG terminal is crucial in SA’s bid to decarbonise the economy while addressing the country’s energy crisis.

The Vopak consortium will design, develop, construct, finance, operate, and maintain the LNG terminal for 25 years.

Vopak, listed on the Euronext Amsterdam stock exchange, has a network of 78 gas, oil and other terminals in 23 countries.

This will be the first terminal of its kind in SA and will particularly benefit the KwaZulu-Natal hinterland, said Moshe Motlohi, TNPA managing executive for the Eastern Region ports.

Consortium partner Transnet Pipelines (TPL) is the custodian of SA’s strategic pipeline assets and handles gas, crude oil, diesel, petrol and aviation fuels.

Transnet says the project aligns with the Department of Mineral Resources and Energy’s Strategic Plan for 2020-25, which focuses on developing the gas market as an alternative energy source to meet limited and depleting energy supply. “It also supports the country’s Integrated Resources Plan and gas-to-power generation targets. Project timelines will see the commercial operation during 2027, with the next step being the signing of the terminal operator agreement, which is currently under negotiation,” says Transnet in a statement.

Some good news for a change

Two other announcements this week suggest Transnet’s new management is wasting little time attempting to reverse the waning fortunes of the state-owned logistics operator.

The first was an announcement that TNPA intends to appoint a panel of qualified service providers as ‘terminal operators of last resort’ to help improve operational performance at its eight commercial seaports “where terminal operator contracts have been suspended or terminated.” The contract is for three years.

“This approach is part of the ports authority strategy of fulfilling its port landlord role as mandated by the National Ports Act, which is to provide a globally competitive South African port system. This will lead to decreased cargo losses and ensure we provide our customers with a cost-effective and sustainable freight logistics solution,” said Anthony Ngcezula, TNPA general manager for commercial services.

The other welcome news was the reduced vessel backlog at the Durban container terminal, which handles most of the country’s container traffic. The backlog has been in single digits for the last two weeks, down from a high of 20 in early December.

“We are not out of the woods, but we have exceeded our set targets of clearing the vessel backlog,” said Earle Peters, managing executive at Durban Terminals. “We are pursuing an aggressive recovery plan, and our main focus is to relieve the pressure on our customers who rely on our service and look to us to provide much-needed value.”

Work continued through the holiday season, and original equipment manufacturers were on site, providing technical support and supplying critical spares of handling equipment for repairs. A fourth shift was introduced in December to improve ship handling times.

“We are confident that the supply chain will soon return to normality as many other processes are involved once cargo leaves the terminal,” said Peters in a statement.