US$ 2.9 billion fuel pipeline launched in South Africa

South African logistics group Transnet has announced it has started operating its largest capital project to date: a new multi-product fuel pipeline. The company has also confirmed that it will take until 2013 to reach the intended capacity.

The new 24 in. pipeline stretching over 550 km replaces an old 12 in. multi-product line from Durban to Johannesburg, which was built in 1965 and is nearing the end of its life.

The line will help supply fuel to South Africa's Gauteng province, the country's economic hub.

"(The new pipeline) is the greenest, safest and most cost-effective method of fuel delivery," Chief Executive Brian Molefe said at the launch.

"It will ensure that the inland market demand is met ... (and) ease road congestion by reducing the number of tankers on our roads."

Including the pipeline, a network of smaller inland pipelines, pump stations and associated terminals, the entire project cost around ZAR 23.4 billion (US$ 2.9 billion), more than double an initial forecast of ZAR 11.1 billion.

Transnet will only be able to use the new pipeline at half capacity and send only diesel until all terminals are completed, so the old line will still be used to send other products.

Once all facilities are ready in 2013, the new line will carry petrol, diesel and jet fuel at a capacity of 1 million l/hr, which can be tripled to meet rising demand over the following two decades via modular expansions.

Molefe added that he was confident there would be no further cost escalations to the project. The pipeline is expected to operate for 75 to 80 years, he added.

Transnet was granted a 59.9% increase in fuel pipeline tariffs for 2011/12 to help pay for the project, and the logistics group applied for another 22% increase in tariffs for the 2012/13 financial year to help cover the costs. 

Read the article online at: https://www.worldpipelines.com/business-news/13012012/2-9_billion_dollar_fuel_pipeline_launched_in_south_africa/