Transnet to increase oil and gas pipeline prices in South Africa

South Africa’s energy regulator has approved Transnet’s proposed 5.1% increase in the price of oil and gas pipelines. Transnet charges producers, including Royal Dutch Shell and BP, for use of its 3800 km of oil and gas pipelines. The pipeline network spans five provinces, including the route between Durban on the east coast, where most of the country’s refineries are located, and Johannesburg.

Transnet originally proposed to raise its allowable revenue by 20%, but the company changed its pricing application on a number of occasions due to difficulties in the construction of its new multi-product pipeline that resulted in delays of dates by which new assets would be brought into operation. These changes lowered the allowable revenue required by the company. The approved 5.1% rise in the price of Transnet’s oil and gas pipelines will result in an increase in allowable revenue to ZAR 2.9 billion in the 12 months through March 2015 from ZAR 2.8 billion in the current year.

Transnet plans to invest around ZAR 300 billion over seven years to construct new rail lines, ports, pipelines and improve infrastructure in South Africa. Petroleum volumes pumped in the year through March 2013 decreased by 5.1% to 15.9 billion litres, after declining 7.1% in the previous year. However, the energy regulator has predicted a 0.9% increase in total volumes pumped in the year through March 2015 to 16.2 billion litres, despite the fact that volumes transported from the coast to inland areas will expectedly fall by around 5.8%.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/14032014/transnet_to_increase_oil_and_gas_pipeline_prices_in_south_africa_145/