South Africa has granted long-term lease agreements to oil majors and traders, including BP and Vitol, at its principal petrochemical hub, resolving a lengthy dispute over short-term leases that jeopardised investment and supply security, according to the national fuels body.
Transport Minister Barbara Creecy extended the lease agreements at the Island View Precinct within the Durban port at the request of the Fuels Industry Association of South Africa. She utilised Section 79 of the National Ports Authority Act, which enabled her to bypass standard procedures in the interest of national priorities.
The Island View Precinct is crucial, handling approximately 70% of South Africa’s fuel imports and serving as the country’s main storage and supply hub.
Avhapfani Tshifularo, CEO of the Fuels Industry Association, confirmed that the association received a letter under Section 79, stating that the long-term access was beneficial for their members. Tshifularo noted that they had been advocating for a longer tenure, which they successfully secured.
A spokesperson for BP indicated that the lease approval was granted to Sapref, a joint venture with Shell, which has been focused on fuel imports at the Island View marine terminal since shuttering its refinery operations and selling the plant to the state-owned Central Energy Fund (CEF).
Engen, where Vitol holds a majority stake, mentioned that the Minister had agreed to the leases under certain conditions, although details were not disclosed.
Tshifularo noted that 25-year lease negotiations would soon commence with the Transnet National Ports Authority (TNPA), indicating a significant development for the industry.
A spokesperson from the transport ministry stated that specifics of the lease letter could not be shared at this time, but a formal statement would be released later. Transnet has indicated it will provide additional information shortly.
The CEF did not respond to inquiries regarding its own separate Section 79 application or how the Minister’s ruling might impact plans to revive the flood-damaged Sapref refinery and enhance its oil trading division, both overseen by the South African National Petroleum Company, a subsidiary of the CEF.