6 months ago

Mpumalanga Business 2021-22

OVERVIEW Oil and gas

OVERVIEW Oil and gas Permits to explore for natural gas have been awarded. SECTOR INSIGHT Sasol has sold some of its share in the Romco pipeline. Sasol announced in 2021 that it was to sell 30% of its stake in the Romco natural gas pipeline that links Mozambique and South Africa. As part of a global sell-off of assets to reduce debt, Sasol expects to earn more than R5-billion from the transaction. The company will continue to be the pipeline’s operator and maintains a 20% stake in the venture. The Romco pipeline could carry far more gas in the future as there have been big finds of new gas off the coast off Mozambique which could be shipped as liquefied natural gas (LNG) to Maputo and continue from there to the Sasol plant at Secunda. The province is already equipped with energy and fuel infrastructure and expertise. The Liquefied Natural Gas Independent Power Producer Procurement Programme (LNG IPPPP) is part of the broader programme of the National Department of Mineral Resources and Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The total allocated to gas-to-power in the national power plan is 3 726MW, of which 3 000MW is for LNG. Three natural gas exploration permits have been awarded to Tosaco Energy for the sandstone-rich area between Amersfoort and Balfour in the western part of the province by Petroleum Agency South Africa (PASA). PASA regulates exploration and production activities, and acts as the custodian of the national petroleum exploration and production database. Tosaco Holdings has a 25% stake in Total SA. Two methane-gas exploration rights have been granted to Highland Exploration in the Evander area. ONLINE RESOURCES Credit: PASA Independent Power Producers Programme: Petroleum Agency SA: PetroSA: The promoters of the Nkomazi Special Economic Zone believe that the fact that the pipeline passes through the SEZ is a big selling point. An alternative would be for the LNG to be shipped to Richards Bay before being piped north. Many of the big mining and manufacturing concerns in Mpumalanga have long-term contracts for the supply of gas with big gas companies. Afrox and Air Liquide are two of the biggest, with the latter having 3 500 national customers, including Sappi and Sasol. International chemicals and energy company Sasol has several large plants in Mpumalanga. Sasol Gas is one of the four operations at Secunda, supplying natural gas to Sasol Synfuels and buying Sasol Synfuels’ methane-rich pipeline gas to sell to customers in Mpumalanga and KwaZulu-Natal. Sasol will be a key player when national government finalises policy on biofuels. Sasol is already making 285 000kl of absolute alcohol in ethanol from sugar fermentation annually. About 60-million litres of liquid fuel is produced each day at the coal-to-liquid plant run at Secunda. Sasol has finished its mine replacement programme and feedstock is secure until the year 2050. ■ MPUMALANGA BUSINESS 2021/22 40

Transport and logistics The N4 Toll Route will receive a R1.5-billion upgrade. OVERVIEW SECTOR INSIGHT A three-year road scheme will benefit small contractors in Nelspruit. The N4 Toll Road began its life in 2000 as a 30-year concession to be run by Trans African Concessions (TRAC) in a private-public partnership with the governments of South Africa and Mozambique. The next three years will see about R1.5-billion spent on the route, which provides a vital link between the landlocked provinces of Gauteng, Limpopo and Mpumalanga with the Port of Maputo, with new interchanges, road repairs and road widening forming part of the brief. The South African National Roads Agency (Sanral) has announced a three-year project which will provide work for small contractors in and around the City of Mbombela. More than R26-million has been allocated to subcontracting which will cover things like litter and minor works, minor maintenance, vegetation and bush clearing. Road improvements which have boosted the transport infrastructure of Mpumalanga include the upgrades to the R570 (linking Malelane on the N4 to Swaziland), the N11 (Hendrina– Middelburg) and part of the vital R573 Moloto Road, which carries huge volumes of traffic to Gauteng and Limpopo. A clause in Sanral’s contract ensures that small companies are involved. Raubex Construction has formed a joint venture with Biz Afrika, Khuluphala Tradings and Themolo Business Enterprise. There is more freight rail traffic in Mpumalanga than in any other province. This is principally because of the transport of coal, but there are also large volumes of chrome, ferrochrome, forestry products, chemicals, liquid fuels and general freight. ONLINE RESOURCES Kruger Mpumalanga International Airport: Maputo Corridor Logistics Initiative: Railroad Association of South Africa: South African National Roads Agency Ltd: The Balfour North to Volksrust section of the Gauteng to Durban mainline carries the largest volumes, most of which is long-haul freight passing through the province. Despite these high rail volumes, a huge amount of mineral product is transported by truck around and out of the province. This puts immense pressure on Mpumalanga’s roads network, particularly in the Gert Sibande District and the Nkangala District. The statistics relating to coal haulage in Mpumalanga are stupendous. In one 12- hour period, 34 198 tons of general freight were recorded for the section of the N4 highway between Nelspruit and Komatipoort. Mactransco’s website states that its trucks serving Tshikondeni Coal Mine travel 3.7-million kilometres per year, working all day for six days a week. The fleet of ABF Legend Logistics, a Super Group company, contains more than 200 super-link coal haulage trucks while another company in the group, SG Coal, claims to have one of the biggest fleets of coal haulage trucks in Africa. Coal Tipper Resources operates out of Bethal. ■ 41 MPUMALANGA BUSINESS 2021/22

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