Thebe Investment Corporation acquired 15% of Burgan Cape Terminals. Other shareholders include global storage terminal operator VTTI (70%) and Jicaro, a newly established 100% black owned BBBEE company with experience in the oil and gas sector (15%).

Established in 2008, Burgan Cape Terminals was formed in response to the severe shortage of storage capacity in South Africa and Government’s drive to improve security of fuel supply and increase storage capacity in line with future fuel demands and the National Development Plan.

Last year, the Port of Cape Town (TNPA) awarded Burgan Cape Terminals a 20-year contract to develop and manage fuel storage and distribution facilities at the Eastern Mole of Cape Town Harbour.

Commenting on the deal, Zukie Siyotula, Chief Executive of Thebe Capital says: “This is a great partnership of skills, expertise and experience and I am extremely excited about the potential that the fuel terminal can unlock, both for Thebe Investment Corporation and for South Africa. This investment allows us to increase our focus on the growth that will come from the energy sector and complements our existing portfolio and strategy perfectly.”

The fuel storage facility in Cape Town Harbour will be multi-purpose and be used for the storage and distribution of both locally produced and imported fuels.

Companies will “rent” space from Burgan for storage of their fuel product. Burgan has already signed long-term (10-year) contracts with oil companies, who jointly aim to throughput up to 805 000m3/year. They will mainly off-take their products from the Chevron Oil refinery.

In case of product shortfall, customers have the option to import product subject to the regulations governing the fuel industry. Burgan’s state of the art truck loading facility will allow for efficient and swift distribution to end-users with limited impact on the surroundings.

For this project, Burgan entered into a joint venture with Rotterdam-based VTTI, which operates, develops and acquires refined petroleum product and crude oil facilities and energy infrastructure assets on a global scale. Total capital expenditure for the project is estimated to be around R650-million.

Wandile Mseleku, CEO of Burgan Cape Terminals says: “We are very proud to partner with Thebe Investment Corporation and VTTI. Thebe has an exceptional track record as a pioneering black owned investment company that is known for its active investment philosophy.

VTTI is one of the world’s top fuel storage infrastructure developers and its experience in and focus on developing storage facilities safely and reliably will be of enormous benefit for this project.”

“The development of the fuel storage facility in Cape Town will not only address the country’s need to increase fuel infrastructure and capacity but it will also have a positive effect on the economy, on global skills transfer and on the transformation of the local energy sector,” says Mseleku.

Govert Rietema, Director of Global Business Development at VTTI BV said: “The ready uptake of the facility by customers makes it clear that there is growing local demand for refined petroleum products in the region. We are so pleased to be able to share our extensive global experience with our local partners and look forward to working together.”

Economic Impact

It is anticipated that the construction phase of the project will create approximately 110 to 130 contract jobs, with an average duration of 18 to 22 months. Approximately 21 operational jobs would be created once the facility is operational.

Regulatory Approval

In order to construct the facility, environmental authorisation is required. Leading global sustainability consultancy ERM has been commissioned to independently conduct the Environmental Impact Assessment (EIA). ERM has submitted the Final Environmental Impact Report to the Western Cape Department of Environmental Affairs & Development Planning for approval. Burgan is also required to obtain a licence from the National Energy Regulator of SA (NERSA) to establish the facility, for which it has applied.