• Ship to shore

    Extensive port development around the continent is a powerful indicator of the anticipated upturn across the sector.

    Ship to shore

    While the oil price has had an impact on exploration, massive improvements to port facilities in several sub-Saharan African countries are under way in preparation for an upturn in the sector and to spur general economic development and trade.

    In Namibia, for example, Namport has two key mega projects in Walvis Bay – the Portof Walvis Bay-North Port development and a new container terminal.

    The North Port project, valued at around N$60 billion, involves developing a 1 330-ha plot of previously undeveloped land located just north of the current built-up area in Walvis Bay, into various cargo handling terminals,with the water in front of it developed to accom­­modate port operations. The project, which includes 10 km of quay walls and jetties to support 30 large berths, comprises six phases: a petroleum product liquid bulk terminal; an LNG gas terminal; a multi-purpose dry bulk terminal; a ship and rig repair facility; the Bots­wana coal terminal; and a dig-out basin. Construction is under way, and the first vessel to call at the port is expected this year.

    According to Namport, among the reasons behind this extensive construction is that, should commercially extractable oil be dis­ covered off the Namibian coast, the current port will not be able to accommodate the associated requirements. Also, the current port’s liquid bulk-handling facilities are too small to cater for the increased demand from SADC countries to import fuel and bulk cargo, while its capacity to accommodate large-scale ships and rig repair operations is limited.

    Namport has said that the petroleum product liquid bulk terminal will replace the existing tanker berth Walvis Bay port, which has reached the end of its designed life. In terms of liquid bulk-handling, Namport will offer berth­ing, loading, transporting and storage, and thus a large area within the North Port development has been zoned for future tank farms, which will be linked to the liquid berths via pipelines.

    The LNG terminal phase of the port development will involve the construction of a dedicated LNG import terminal that will supply gas to a 250 MW power station in Walvis Bay. The terminal will include a tanker berth with trestle access to the shore to house product pipelines.

    The ship and rig repair facility will include the construction of a large dry-dock/ship-lift structure with associated quay walls and dredging to create dry docking facilities for very large vessels. The Botswana coal terminal phase will see the construction of no fewer than five offshore berths dedicated to coal export. This dry bulk terminal will eventually be able to handle 100 million tons of coal per year – making it one of the largest dry bulk terminals in the world.

    Demand for port services in East Africa is expected to outstrip capacity by 2022. Lamu Port, officially the Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET), is a public-private partnership that will join three East African countries – Kenya, South Sudan and Ethiopia – and open a transport corridor that will spur trade in the region.

    Hailed as ambitious, the US$25.5 billion LAPSSET development includes a port with32 berths (the estimated cost of this aspect is US$5 billion), standard gauge rail, 800 km road system and highway, international airport, and an oil pipeline and refinery. A special economic zone/industrial area and a resortcity is also part of the plan.

    The pipeline referred to is the Kenya crude oil pipeline or the Lokichar-Lamu pipeline, which starts at Hoima in Uganda and moves to Lamu via Lokichar. The South Sudan section, which will connect Lamu to Isiolo to Juba, will be connected at Lokichar in northern Kenya. French firm Total SA has committed to investing in the Lokichar-Lamu pipeline, which means that the East African region will have two crude oil pipelines: one running from Kenya’s Turkana oil fields to Lamu Port and the other from western Uganda to Tanzania.

    Once complete, the port will be able to handle the largest ships in the world with its 500m-wide channel and depth of more than 18m. The first three berths in Phase 1 are expected to be completed in June 2018 with the remaining two scheduled for 2020. The full project is due to be finished by 2030.

    Tanzania’s Port of Dar es Salaam currently handles around 95% of the country’s external trade. Its two next-largest ports, Tanga and Mtwara, collectively handle around 1 million tons of traffic each year. The Port of Dar es Salaam has seen rising traffic over recent years – between 2011 and 2016, throughput increased by 3.4 million tons annually. Such growth in output made the expansion of the port a priority. In 2017, Tanzania announced a US$421 million project to strengthen infra structure at the port – the Dar es Salaam Maritime Gateway Project (DSMGP).

    Port infrastructure is back in the spotlight as the oil price shows signs of rebounding

    The DSMGP aims to overhaul the port’s infrastructure by 2023, and will see the construction of a new multi-purpose berth at Gerezani Creek, dredging of the port’s entrance channel, and intermodal improve ments to rail and road linkages. By 2020, the 11-berth port should see its handling capacity more than double to 28 million tons per year, as a direct result of the upgrades, while berth wait times should be reduced from 80 hours to 30 hours.

    South Africa’s Port of Saldanha Bay is a crucial resource for the sustainable growth and development of the country’s West Coast region. On 31 October 2013, the SaldanhaBay Industrial Development Zone (SBIDZ)was officially designated as the country’s fifth Special Economic Zone – the first to be designated in a South African port. It aims to be a world-class marine engi­­neering hub focu­sed on the oil and gas sector, incor­porating the allied services and support industries.

    According to Laura Peinke, SBIDZ business development executive, the value proposition for the 356-ha designated footprint is a custom controlled area, also known as a free trade zone or free port. While it will attract invest­ment from both the international and domestic markets, the focus is on providing a base for services to the export market, she says.

    The SBIDZ operates on a leasing basis – be that short-term, long-term or for temporary projects – and can accommodate multiple tenants at a time. Peinke explains that all facilities are set up on a bespoke basis, per an investor’s needs. So, while all the enabling infrastructure is in place, such as roads, electricity, water, security, port and quayside logistics, and zoning, whatever topside infrastructure an investor might need – for instance, a manufacturing business might require a warehouse for storage – is tailored specifically to them. ‘Each time we meet with a new investor we start from scratch with their requirements,’says Peinke. ‘We offer facilities like an industrial park, but we don’t squash tenants into a pre-existing unit; rather, we customise it to their needs.’

    With regard to new-build infrastructure projects to support the oil and gas services and marine repair and fabrication cluster, Peinke says three such initiatives were earmarked under Operation Phakisa: Oceans Economy to be driven by the Transnet National Ports Authority (TNPA). These included an offshore supply base; Berth 205, a dedicated rig and vessel repair quay; and the Mossgas Jetty, an equipment and vessel servicing facility.

    According to Peinke, the idea is to appoint an operator for the offshore supply base first, and once the ball is rolling there, concentrate on the remaining two projects. In late 2017,the TNPA appointed a bidder for the offshore supply base and it is hoped that negotiations will be concluded by end March this year.

    Peinke says the current improved oil price and the fact that various projects around the world that were suspended are now coming back online is a positive show for the industry. ‘In the last three weeks we’ve received five inquiries from rig operators asking when Berth 205 will come online. So, we know there is interest in the infrastructure.’

    Asked why a development such as the SBIDZ is important, Peinke argues that ‘SA Inc’ has a value proposition that has not yet been fully exploited. International companies, according to her, have long recognised that South Africa has a strong and capable stock of suppliers, contractors and skills. In addition, the oil and gas sector has continued to grow over recent years, despite the lack of promotion.

    ‘We said, imagine what we could do, imagine how we could grow this sector if we provided dedicated infrastructure,’ says Peinke. However, there’s more to it than providing infrastructure and attracting investors to support their operations in Africa, she adds.‘It’s also about saying that we want SA Inc to be able to benefit and grow as an economy and to provide sus­tainability in terms of enterprise develop­ment, skills and training, and to have a successful and sustainable impact on the surrounding community.’

    By Toni Muir
    Image: Gallo/Getty Images