TRANSNET has issued a request for proposals to design, finance, build and operate a liquid-bulk terminal to handle petroleum products at SA’s biggest port as a shortage of refining capacity is expected to spur growth in imports.

Bidders must be at least 51% owned by black citizens to qualify to participate in the 25-year concession at the Durban port, the state-owned rail and ports operator, said in a document posted on the Treasury’s website. Bids need to be submitted by January 27.

The continent’s most-industrialised economy plans to build fuel terminals as demand for storage in Africa grows. Chevron, which is selling its South African assets, had objected to plans for more storage facilities to hold fuel imports. The country is also working toward being able to handle cleaner fuels that have lower sulphur content.

Estimates on the cost of upgrading terminals to work with the new specifications range from $2.7bn to $7bn. It is unclear how this will be paid.

"Based on the current growing demand for liquid fuels and the lack of investment in refining or alternative liquid-fuel manufacturing capacity, SA and the region will remain short of products in the foreseeable future," Transnet said in the document. "This will result in growing import volumes of final product and components." It expects Durban’s fuel imports to growto 34.5-billion litres in 2044 from 5.2-billion this year.

Puma Energy, whose largest shareholder was commodity trader Trafigura Group, was planning a fuel depot in the port of Richards Bay as it expanded its operations, it said in February. The fuel retail and storage company expects the 46 million-litre oil-products terminal on SA’s east coast to be operational by the end of September.

Burgan Cape Terminals,70% owned by a Vitol Group-led venture VTTI BV, is building a fuel-storage facility in Cape Town, a venture Chevron initially opposed and which is due to be completed in early 2017.

Bloomberg

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