Customer Conference --Infrastructure Development in the South African Ports

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1 delivering freight reliably delivering freight reliably Customer Conference --Infrastructure Development in the South African Ports By: Hamilton Nxumalo Date: 30 September 2013 PAGE 0

2 Contents delivering freight reliably TNPA Capital Investment Programme Regional Investment Projects Business Opportunities 1 PAGE 1

3 TNPA 7 YEAR CAPEX PROGRAMME delivering freight reliably Data Programme Sum of 2012/13 Sum of 2013/14 Sum of 2014/15 Sum of 2015/16 Sum of 2016/17 Sum of 2017/18 Sum of 2018/19 Total CPT DBN DRS EL HO LHS MSB NGQ PE RCB SLD Grand Total PAGE 2

4 OIL AND GAS MARKET CONDITION 1. The West Africa offshore oil and gas market is expanding strongly 2. However, South Africa has limited domestic offshore oil and gas activities 3. The maintenance, modification and operation (MMO) market is projected at $39.5bn 4. In East Africa the emerging oil and gas nations are also picking up pace and are experiencing strong growth in energy related FDI s (foreign direct investments) both on- and offshore. 5. Nigeria and Angola are rapidly expanding their oil and gas infrastructure through Joint Ventures, favourable incentives for FDI s and these are coupled with government regulations that demand technology transfer and require development of local content. PAGE 3

5 Source: Frost & Sullivan: Saldanha Bay IDZ Strategic Marketing Plan PAGE 4

6 LIST OF AFRICAN PORTS THAT COULD BE COMPETITORS AND/OR PARTNERS IN THE OIL AND GAS VALUE CHAIN Source: Frost & Sullivan: Saldanha Bay IDZ Strategic Marketing Plan PAGE 5

7 Non captured market ships bypass the Southern African ports annually vessels call into SA Ports annually: Durban 4 554; Cape Town 2 775; R-Bay & other ports PAGE 6

8 Benchmark Comparison: Keppel Shipyard Singapore Benchmark Comparison Keppel Shipyard Singapore There is no doubt that we must position ourselves to participate in this market: Oil and Gas and Ship repair are one of the largest contributors to GDP in the Singapore economy. 1. Keppel is one of 3 shipyards in Singapore. 2. Keppel employment exceeds the headcount of the Singapore Government! PAGE 7

9 SHIP REPAIR AVAILABLE MARKET SHIP REPAIR annual port visits 472 offshore supply vessels in West Africa 4000 opportunistic passing vessels All vessels dry-dock once every five years! 105 ships dry docked annually in Durban and Cape Town 40 vessels dry docked annually in EBH private dock. 145 ships are docked per annum in SA. About 5% of the market is captured. Numerous ships are turned away because of dock availability. Available market well exceeds capacity by more than 15 fold! OIL AND GAS 820 Rigs in the world (excluding platform rigs) 63 Rigs in West Africa In 2010 it was reported that 134 Rigs bypass South Africa. 4 were repaired in Cape Town Available Oil & Gas market is R3 to R5 Billion per annum. Captured market is currently around R1 billion per annum. Available market exceeds capacity by over five fold! PAGE 8

10 CAPE TOWN MARKET 1. Cape Town is ideally situated to service the oil offshore industry off West Africa. It is a favoured location for most of the clients operating offshore tonnage in the region, although sometimes the deviation costs for smaller projects cannot be justified. 2. Cape Town is also the hub for certain fishing fleets, which provides a sustainable business to some of the smaller contractors. 3. The offshore diamond mining vessels mining off the West Coast mainly operate out of Cape Town. 4. The Cape is also situated on one of the world s busiest sea routes for general cargo vessel, tankers, container ships and many others. This offers Ship Owners the opportunity to call into port for drydocking and repairs 5. Another market sector serviced by the ship repair industry is Voyage repairs, or as often termed travelling repairs. This allows the execution of repairs during a vessels sea voyage so as to prevent any delays in port. PAGE 9

11 SHIP REPAIR FACILITIES IN CAPE TOWN Sturrock Dock (1) Ship repair location Robinson Dry Dock (2) Sturrock Dock (1) Snycrolift(3) Robinson Dry Dock (2) PAGE 10

12 FUTURE PLAN Ensco DS-1 Yacht Basin infill, expanded ship repair facilities (lease ends in 2023) Shipyard & Dry dock PAGE 11

13 Saldanha Bay Short Term Layout Oil Supply Base Semi/Submersibles Jack-up rigs PAGE 12

14 PAGE 13

15 Saldanha Bay Artist s Impression Future Saldanha Proposed Bay IDZ Artist s Impression Future (Industrial Development Zone) Extension of Multi- Purpose Terminal to a 500m rig repair facility Dedicated OSB (Oil Supply Base) Proposed Iron Ore Facility in Feasibility stage PAGE 14

16 OIL / GAS FOCUS CT & SLD Port of Cape Town Focus on existing ship repair industry Facilitate wet side repair / modification of vessels Concentrate on module fabrication & installation Floating Production Offload Storage vessel modifications Facilitate logistics supply services Port of Saldanha Focus on short term development on establishing and oil and gas hub Sect. 56 process to be followed w.r.t terminal operator for the to be established facility Potential for large scale fabrication projects Utilize large land / water areas to develop large scale oil / gas projects PAGE 15

17 RELOCATION OF MANGANESE PLANT IN PORT ELIZABETH Manganese (Mn) export capacity through PE is currently capped at ~ 5.5Mtpa (rail) supplemented by Durban (~1.8Mtpa rail & road) and Richards Bay (~0.3Mtpa -road) SA, as the major supplier of higher grade Mn ore, is well positioned to capture 25 to 30% share of the global Mn ore industry from 2020 onwards Local Producers incl. emerging and junior miners - are investing to meet this demand Transnet has committed to: Close and decommission the current Mn terminal in PE Create rail capacity from the Northern Cape to a new, expanded and modern manganese facility in the Port of Ngqura Provide capacity ahead of demand in enacting its developmental mandate PAGE 16

18 Project Objectives The project delivers on all the strategic priorities underpinning the MDS: Supply capacity ahead of demand by increasing Mn ore export capacity from 5.5Mtpa to 16Mtpa by 2020, scalable to 22Mtpa with additional investment Facilitate transformation of the industry through broad based participation for new entrants and junior miners by offering innovative and cost effective logistics solutions Address the requirements (location and services) for a consolidation terminal for junior miners Provide a solution that is capital efficient with competitive operational costs Stimulate job creation in South Africa (direct and indirect) Contribute to sustainable operations through the relocation of the PE terminal and shifting traffic from road to rail The Project contributes to the positioning of the SA Manganese Industry as the leading global producer. PAGE 17

19 Manganese Export Facility in the Port of Port Elizabeth decommissioning in March 2018 PAGE 18

20 Relocation of bulk liquid in Port Elizaberth The existing bulk liquid berth and associated tank farm will be decommissioned and relocated to the Port of Ngqura ~ circa A new berth (berth A100) will be constructed to handle the imports previously imported through the port of Port Elizabeth this berth is expected to be available ~ 2016/17 interim measures have been put in place to handle the bulk liquids over berth B101 should berth A100 not be completed in time. Products expected to be handled at the new tank farm in Ngqura are petrol, diesel, molasses and jet fuel among others. PAGE 19

21 Port of Ngqura medium term framework plan New bulk liquid berth New tank farm PAGE 20

22 New Manganese Export Terminal and Liquid Bulk at Port of Ngqura Commissioning in March 2018 Container Handling Manganese Export General Cargo Liquid Bulk PAGE 21

23 delivering freight reliably delivering freight reliably NEW CONTAINER PORT (PROPOSED DURBAN DIG- OUT PORT) PAGE 22

24 Roles of the Container Ports Durban handles two thirds of all imports and exports due to its proximity to Gauteng. CAPE TOWN: Services the Western Cape hinterland. Handles small volumes of time-sensitive Gauteng containers. CAPE TOWN 2011: 0.7m TEU 2018: 0.9m TEU 2042: 2.2m TEU PE+NGQURA 2011: 0.8m TEU 2018: 2.0m TEU 2042: 5.8m TEU DURBAN 2011: 2.7m TEU 2018: 4.0m TEU 2042: 12.0m TEU NGQURA (WITH PE): Services the Eastern Cape hinterland. Secondary gateway to Gauteng. Potential to handle Southern African and inter-continental transhipments. DURBAN: Premier gateway for Gauteng and Southern African containers. Services Durban and the KZN hinterland PAGE 23

25 A New Container Port in Durban The Durban to Gauteng freight corridor forms the backbone of South Africa s freight transportation network, and is vital in facilitating economic growth for the country and the Southern African region. South Africa s ability to improve efficiencies and lower logistics costs on the corridor, and to provide freight handling capacity ahead of demand, will be critical to the region achieving its short, medium and long term economic objectives. The need for a new mega-container port in Durban has been established. The best development options to meet this need will be conceptualised over the next 2 years. The research has been completed to make the case for the acquisition of the old Durban Airport site. Purchase of land has been approved. PAGE 24

26 Program for the Durban Dig-Out Port Development Concept (FEL1) Pre-feasibility (FEL2) Feasibility (FEL3) Construction (FEL4) Best Practice Viability Conceptual Plans Prioritised Development Options EIA Engineering Design Dredging and port construction Commissioning Integrated Planning Commercial Sustainability Engagement PAGE 25

27 Vision for the New Port Development The largest port in Africa A world class port A world class supply chain and logistics system A leading-edge green port A community port State of the art security PAGE 26

28 Artists Impression of phase 1 of the proposed dig-out port PAGE 27

29 delivering freight reliably delivering freight reliably COAL DEVELOPMENTS IN RICHARDS BAY PAGE 28

30 Transnet Capacity To Handle Coal Through Port Of Richards Bay Contextualizing the Coal system PAGE 29

31 New coal terminal PAGE 30

32 Solutions for Coal Exporters in Richards Bay The new terminal will have a capacity of 32 Mtpa and will be constructed on the 500-series berth ( long term initiative). A separate rail loop to service the terminal. Estimated cost for the construction of the Terminal is R14.7 Billion Construction will begin in 2016 and completed by Capacity of 4 Mtpa is available at the MPT Terminal in Richards Bay. TNPA is creating short-term capacity of 1 Mtpa on the 600 series berths in RBAY will be available by April An additional 12 Mtpa of capacity will be created by converting berth 702 from imports to exports will be available by 2018 PAGE 31

33 A New 32mtpa Dedicated Coal Terminal Adjacent to Transnet s Current Dry Bulk Operations A pre-feasibility has been completed, and environmental and detailed design will begin in 2013/2014. The new dedicated coal facility is expected to be commissioned in This facility will be in addition to the 91mtpa facility already in operation. PAGE 32

34 delivering freight reliably delivering freight reliably BUSINESSES IN CONCEPTUAL STAGES PAGE 33

35 New Business Opportunities Development of waterfront facilities in Mossel Bay, Port Elizabeth and East London Rehabilitation of the grain elevator in East London Construction of the oil tank farm in Ngqura One Passenger Terminal each at the ports of Durban and Cape Town The development of a coal terminal in East London PAGE 34

36 Projects that are in progress Berth deepening in Durban Coal terminal in Richards Bay Expansion of the iron ore terminal in Saldanha The dig-out port at the DIA site PAGE 35

37 Opportunities for Public Participation Built, own and transfer of the Passenger Terminals in Cape Town and Durban Built, own and transfer of the Coal Terminal in Richards Bay Terminal Operator for the Container Terminal in the Durban Dig-out Port Terminal Operator for the Container Terminal in Ngqura Terminal Operator for the Manganese Plant in Ngqura Ship repair facilities in Cape Town and Richards Bay Participation in the oil and gas industry Built, own and transfer of the Coal Terminal in East London Terminal Operator for the Break Bulk terminal in Ngqura PAGE 36

38 ARTIST IMPRESSION DESIGNS: DURBAN CRUISE TERMINAL PAGE 37

39 ARTIST IMPRESSION DESIGNS: CAPE TOWN CRUISE TERMINAL PAGE 38

40 Thank You Thank you PAGE 39