Saldanha port expansion into oil and gas on the cards

freightliner-385677_640.jpgThe Transnet National Ports Authority (TNPA) is planning to spend R9.7 billion to develop its oil and gas infrastructure at its port of Saldanha Bay. This project is aimed at enhancing the deep-water port's ability to service the offshore oil and gas industry.

Situated along the West Coast about 120 km (72 miles) from Cape Town, Saldanha is South Africa's deepest natural port. Its geographical proximity to a slew of new oil and gas finds on either side of the continent is seen as giving it an edge over other repair hubs in Europe, Singapore and Dubai.

About 120 oil rigs passed SA's coastline annually. Most were unable to obtain services in Saldanha as the port was not equipped to meet the demands from the sector. These new developments will allow oil exploration firms to save millions by having their rigs repaired in South Africa, rather than towing them to Singapore, which could take up to 100 days for a rig that rents out for around $500,000 a day.

The construction of the new rig repair for berth 205 will accommodate two rigs at a time. The Mossgas Quay wall will be expanded from 38 metres to 500m with the depth of 8.5m. Both the projects will be commissioned in 2018.

An offshore supply base will also be built to serve as a one-stop shop to supply oil rigs with their basic needs, such as food and materials, and waste collection.

The projects will create an estimated 6,300 new direct jobs and 25,200 new indirect jobs, and contribute an estimated R4.74bn to gross domestic product.

Custom Control Area
As part of this project, the Saldanha Bay Industrial Development Zone is developing this area as a Custom Control Area. This is seen by many as a key draw card for companies to use this port. The benefits of creating this as a CCA or Free port includes:

  • Companies operating within the zone will be relieved from import duties on manufacturing assets, as well as any goods for storage and raw materials used in the manufacturing process.
  • Investors will also be exempt from export duties on goods exported from the CCA to a foreign country and on services rendered within the IDZ.
  • In addition, no value-added tax will be payable on goods imported for use in the construction and maintenance of the CCA's infrastructure, or on land acquired or rented in the CCA, or on the electricity and water supplied.

This project and the new developments are sure to attract companies and investors that are looking to use Saldanha Bay to position themselves for Africa's longer-term offshore growth prospects.

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