Pipeline development. Foreword

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Foreword

Pipeline networks form the infrastructure backbone for transporting large volumes of liquid petroleum and gas. The networks play a strategic role in the logistical supply chain to ensure security of supply to inland markets, in a cost-effective, efficient and environmentally sustainable manner. Global economic trends require pipeline infrastructure to provide capacity ahead of demand, while allowing sufficient flexibility to adapt to change.

South Africa has a strong emerging market with its major business hub situated 600 kilometres away from the coastline. Appropriate long-term planning for pipeline and associated infrastructure is therefore fundamental to support South Africa’s progressive long-term economic growth, while taking advantage of market opportunities, providing equitable access to participate and lowering the cost of logistics in South Africa. A key planning goal in the petroleum and gas environment is to align planning initiatives with National Government, the oil and gas industry and other key stakeholders, particularly in providing diverse and sustainable energy sources.

Ms Sharla Pillay

Chief Executive: Transnet Pipelines

PiPeline

develoPment

Plan

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1. introdUCtion

This chapter of the Long-term Planning Framework (LTPF) summarises the national pipeline development plans for South Africa, comprising the pipelines owned and operated by Transnet and pipelines owned and operated by other entities (private terminal operators, oil companies and freight logistics operators). The LTPF provides a national overview of the liquid petroleum and gas requirements of South Africa. The overview is aligned to the National Energy Security Master Plan, other related master plans and falls within the prescribed Regulatory Framework. Liquid petroleum includes crude oil and refined fuels. Refined fuels transported in pipelines in South Africa include petrol, diesel and jet fuel. Natural gas and methane-rich gas are also transported in pipelines.

Included in this section are the key pipeline planning goals used to generate the long-term pipeline plans, an analysis of the current pipeline trends and related issues, and an overview of the national pipeline network. The summarised liquid petroleum and gas demand forecast for the next 30 years is shown. Following the demand forecast, the pipeline and terminal storage development plans to meet the demand for South Africa are described.

The pipeline development plan concludes with an assessment of new emerging technologies that may impact on the proposed development plan, followed by an overview of the planned pipeline and terminal investments over both a seven and 30-year period in South Africa.

Transnet’s current New Multi-product Pipeline (NMPP) project consists of a collection of sub-projects, of which the major investments include a 24 inch Multi-product Pipeline (MPP24) and accumulator terminals at the coast in Durban and inland at Jameson Park in Gauteng. In addition, the NMPP project includes two 16 inch pipelines (from Kendal to Waltloo and Jameson Park to Alrode) to enhance the capability of the existing northern pipeline distribution network. The new MPP24 is now complete, and will be referred to as the MPP24 going forward.

The LTPF considers two scenarios for pipeline development in South African over the next 30 years, to support the proposed Mthombo oil refinery at the Port of Ngqura. Two pipeline scenarios considered for transporting project Mthombo’s refined fuel to the hinterland are as follows:

• Scenario 1: Transport refined fuel via proposed

Ngqura to Gauteng pipeline (NGP); and

• Scenario 2: Ship refined fuel from Ngqura to Durban

and then transport via the MPP24 to Gauteng.

1.1 Planning goals

The following general planning goals were used to inform the development of South Africa’s long-term pipeline and terminal plans:

• Follow a common user principle in developing an

integrated liquid fuels supply system;

• Meet the market demand and provide equitable

access and capacity for all parties that want to

• Provide a logical range of facilities to meet local as

well as hinterland demand and avoid duplication of investment;

• Review capital investment, minimising regret

investments across the oil and gas sector to meet the long-term national demand for liquid fuels;

• Facilitate security of supply objectives of the

Department of Energy, comply with the Petroleum Pipeline Act and the Gas Act;

• Align with the planning initiatives of local, provincial,

national Government and other key stakeholders;

• Improve infrastructural and operational efficiencies

and reduce transport and logistics costs;

• Review existing storage and back-of-port logistics

areas to increase capacity;

• Integrate and align pipeline with port and oil terminal

capacity planning;

• Align pipeline and terminal development planning with

trends in oil and gas logistics;

• Maintain the flexibility to respond to changing

technological and economic conditions; and

• Respond to environmental opportunities and

constraints in a sustainable manner.

1.2 Key issues

The key issues that influence long-term pipeline and terminal planning have been identified as:

• Government’s Clean Fuels 2 Programme and the

impact on security of supply;

• Product specifications vs pipeline specifications; • Slow-down in local economy and lower fuel demand; • Worldwide trend towards greater specialisation,

centralisation and economies of scale;

• Implementation of new refining capacity and

strategic reserves (stocks);

• Developments of alternative routes by landlocked

countries;

• Restructuring of logistics networks, and improvement

in dealing with capacity constraints at terminals and intermodal transport links;

• Transport and handling of alternative forms of energy,

such as liquid natural gas (LNG), natural gas (NG) and

compressed natural gas (CNG);

• The need for sustainability in developing

infrastructure solutions, as well as increased stakeholder engagement on key issues; and

• The award of leases by Transnet National Ports

Authority (TNPA) in the existing Durban port and impact on the rationalisation of the oil industry infrastructure in Island View and the proposed new Durban Dig-out Port (DDOP).

1. introdUCtion

(continued)

1.3 RegulatoRy fRamewoRK

The regulatory framework within which pipelines for liquid fuels and gas operate in South Africa is depicted below.

Figure 1: South African regulatory framework

• Petroleum Pipelines Act

(Act No 60 of 2003)

• Petroleum Products Act

(Act No 120 of 1977)

• Gas Act (Act No 48

of 2001)

• National Energy

Regulatory Act (Act No 40 of 2004)

Department of Energy

South African Regulatory Framework – Pipelines environment

• National Environmental

Management Act (Act

No 107 of 1998) • National Environmental

Management:

Biodiversity Act (Act No

10 of 2004)

Management: Protected

Areas Act (Act No 57 of

2003)

Management: Air Quality Act (Act No 39 of 2004)

Department of Environmental Affairs

• Occupational Health

and Safety Act (Act

No 85 of 1983)

Department of Labour

• National Key Points

Act (Act No 102 of

1980)

Department of Safety and Security

The National Energy Regulator of South Africa (NERSA) regulates pipelines within the ambit of the Petroleum Pipelines Act and the Gas Act as well as associated regulations; thus NERSA functions as:

• Gas Regulator in terms of the Gas Act;

• Petroleum Pipeline Regulator under the Petroleum Pipelines Act; • Regulator and overseer of all of Transnet Pipeline’s activities; and

• Authority on Transnet Pipelines’ tariffs based on the ‘allowable revenue’ principle. 1.4 PiPeline netwoRK

national pipeline network

The following diagram illustrates the existing national pipeline network as well as potential future new pipelines within South Africa, including non-Transnet-owned pipelines.

Figure 2: National pipeline network

National pipelines network

non-transnet pipeline network Chevron crude pipeline

An existing 16 inch, 108km pipeline runs from the Strategic Fuel Fund (SFF) tank farm in Saldanha Bay to the Chevron refinery in Milnerton, Cape Town.

Other pipelines exist between the refinery and the

Cape Town harbour. These include a 26 inch, 13km crude

pipeline, a 10 inch heavy fuel oil line and a 12 inch, 13km multi-product (white oil) pipeline (bi-directional).

Rompco gas pipeline

Rompco, a fully owned subsidiary of Sasol, owns a natural gas pipeline from Mozambique to South Africa.

Gas has been supplied through the pipeline 865km

from the Pande and Temane fields in Mozambique to Secunda since March 2004. The gas from Mozambique is marketed in Gauteng and KwaZulu-Natal, primarily for industrial use.

PetroSA offshore gas pipeline

A 450mm diameter, 85km gas pipeline from the offshore

FA Platform to the onshore gas-to-liquids (GTL) refinery

in Mossel Bay.

PetroSA offshore condensate pipeline

A 200mm diameter, 85km condensate pipeline from

the offshore FA Platform to the onshore gas-to-liquids

refinery plant in Mossel Bay.

Ngqura to Gauteng pipeline (NGP) (proposed)

A New Multi-product Pipeline is proposed to supply liquid fuel from the proposed Mthombo refinery in Ngqura to Gauteng. The pipeline is estimated to be 1 000km long and

have a design flow rate of 1 500m3_{per hour.}

Petroline (proposed)

Petroline RSA (Pty) Ltd together with Petroline SARLS.A.R.L (Mozambican) are shareholders of

Petroline Holdings, the company that will operate the pipeline from Maputo to Kendal. Petroline has a 25-year

licence to construct and operate a 16 inch pipeline with a

capacity of 3,5 billion litres per annum. West Coast gas pipeline (proposed)

The West Coast gas pipeline system is envisaged to

potentially connect the Kudu and Ibhubesi gas fields off the coast of southern Namibia to a potential future national South African gas pipeline system.

This system will consist of various pipelines from the

offshore gas fields, south to Cape Town and possibly to Mossel Bay and Port Elizabeth and east to Gauteng.

An alternative route similar to NGP from the Eastern

Cape could link into Gauteng and provide a transmission

system for shale gas. A spur to East London could also be considered.

Mossel Bay liquefied natural gas imports (proposed)

South Africa’s national oil company PetroSA has engaged a contractor to do a feasibility study, as well as the front-end engineering design (FEED) study

into a proposed LNG import facility at Mossel Bay, in the Western Cape. The facility would enable PetroSA

to import LNG to supplement gas reserves at the company’s GTL refinery.

The supply of LNG to other potential off-takers, such as electricity producers, is considered crucial to the success of the project.

PetroSA’s project Ikhwezi was designed to extend the life of the GTL refinery for six years up to 2020. Further development of other gas prospects near to the F-O field could potentially sustain the life of the refinery

until 2025.

transnet pipeline network

The following diagram depicts Transnet’s existing pipeline network within South Africa:

Figure 3: Transnet’s pipeline network

Transnet’s pipelines network

Transnet’s pipelines Refined fuels pipeline network

• Durban – Alrode (Gauteng) • Inland distribution network • Current capacity 4,5blpa

• NMPP24 adds 26 blpa at full expansion

Crude oil pipeline

• Durban – Natref • Current capacity 5,3blpa

Avtur pipeline

• Natref – Airport (ORTIA) • Current capacity 1,2blpa

Methane-rich gas pipeline

• Secunda – Durban • Current capacity 23MGJ pa

Other pipelines

• Ngqura-Gauteng pipeline

• Additional 15blpa capacity from 2018 could delay part of the MPP24 Phase 2 from 2014 to 2035, and subsequent phases

• Maputo-Gauteng pipeline • Private-sector (Petroline) pipeline • Construction not yet started

Transnet’s pipelines network

Transnet’s pipelines

Refined fuels pipeline network • Durban – Alrode (Gauteng)

• Inland distribution network

• Current capacity 4,5blpa

• NMPP24 adds 26 blpa at full expansion

Crude oil pipeline • Durban – Natref

Avtur pipeline

• Natref – Airport (ORTIA)

Methane-rich gas pipeline • Secunda – Durban

• Current capacity 23MGJ pa

Other pipelines

• Ngqura-Gauteng pipeline

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1. introdUCtion

(continued)

Durban to Johannesburg pipeline (DJP)

During the 1960s the existing railway lines from Durban and Mozambique did not have sufficient capacity to meet the demand of the Gauteng hinterland for refined

petroleum products. By 1965 a multi-product 12 inch

pipeline, generally known as the DJP, was constructed. The pipeline has reached the end of its technical and economic life and is currently being replaced by a new 24 inch Multi-product Pipeline, the MPP24.

The DJP is currently utilised for transporting petrol from Durban to the inland network, and both petrol and

diesel to Ladysmith, Bethlehem and Kroonstad. This will

continue until the MPP24 is ready to transport

multi-products from 2015 upon completion of the accumulator

terminals. The DJP can transport jet fuel to OR Tambo International Airport (ORTIA) if required, but it is not currently part of the normal operational pattern, however, the option is available for strategic security of supply purposes.

The current operating capacity of the DJP is 3,72 billion litres per annum. Decommissioning of the pipeline is planned when the MPP24 becomes fully operational.

Methane-rich gas pipeline

A second 16 inch refined multi-product pipeline, from Durban to Witwatersrand (DWP) followed in 1973, but the subsequent construction of the Secunda coal-to-liquids refinery rendered the pipeline underutilised.

In 1995 a section of the pipeline was reconfigured to

convey methane-rich gas from Secunda to Durban, via Empangeni, known as the Lilly line.

The Lilly line carries methane-rich gas from Secunda to Durban with off-take points at Newcastle, Empangeni/

Richards Bay and Durban area. The maximum capacity of

the pipeline is 23 million gigajoules (MGJ) per year. It is expected that demand will exceed the line’s capacity in the early 2020s.

New 24 inch Multi-product Pipeline

The new MPP24 includes the Durban to Jameson Park trunk line, from where it ties into the inland network

at the Jameson Park Terminal near Heidelberg. The

new pipeline debottlenecking and upgrades to the inland network have been completed and the network is currently fully operational. Additional pipelines implemented as part of the overall NMPP project included a 16 inch multi-product pipeline from Kendal to Waltloo and a 16 inch multi-product pipeline from Jameson Park to Alrode.

Currently the MPP24 trunk line is used to transport 500 ppm diesel from Durban to Jameson Park. Petrol will be introduced into the MPP24 trunk line in 2015 when the Coastal (TM1) and Jameson Park (TM2) terminals are

commissioned enabling the pipeline to carry multiple product grades.

The MPP24 is designed to transport jet fuel from Durban to Jameson Park from where it will be transported by an existing 16 inch pipeline via Alrode and into a section of the current DJP to ORTIA. A future dedicated jet fuel line is planned from Jameson Park to ORTIA.

Jet fuel will be introduced into the MPP24 when a

technically feasible solution is found to address Clean

Fuels 2 product quality issues and when inland jet fuel

demand is sufficient. Current capacity to supply jet fuel

to ORTIA by rail and the dedicated jet fuel pipeline from Sasolburg to ORTIA are expected to be insufficient from 2019 onwards.

The management of jet fuel in the MPP24 requires special attention due to strict quality management requirements. The proposed operating philosophy will require re-batching and quality certification at TM2 before transfer to ORTIA.

The current installed capacity of the MPP24 trunk line is

8,76 billion litres per annum. Jet fuel pipeline (Avtur)

The aviation turbine fuel is a commodity known as

‘Avtur’ or ‘jet fuel’. The current dedicated pipeline (94km)

transports jet fuel from the Natref refinery in Sasolburg to ORTIA east of Johannesburg.

The demand on the dedicated jet fuel pipeline is dependent on the production at Natref (supplemented by synthetic jet fuel from Secunda) rather than demand at ORTIA. The line is currently operated at close to its maximum capacity and will continue to run at its maximum operating capacity into the foreseeable future.

The installed capacity of the pipeline is 1,3 billion litres per annum.

Crude oil pipeline (COP)

The COP was commissioned in 1971 to transport crude

oil from Durban to the inland crude refinery Natref in Sasolburg, as well as to the used coal mines in Ogies (Kendal node) as part of the then strategic reserves.

A reconfiguration of the 18 inch crude and 16 inch DWP

systems were done with the introduction of

methane-rich gas. The reconfigured COP consists of a 16 inch section and an 18 inch section. Capacity was increased

during 2002, triggered by the Natref refinery capacity expansion, by adding five en-route (booster) pump stations, which gave the pipeline sufficient capacity to meet current and anticipated future demand.

With the introduction of the Clean Fuels 1 programme,

Natref’s refining capability was effectively reduced resulting in unused capacity of approximately 100m3_per

hour in the COP.

With the introduction of the Clean Fuels 2 programme,

currently promulgated to be introduced in July 2017, it is expected that Natref would increase production to

nameplate capacity and the COP would again operate at

design capacity.

The current installed capacity of the COP is 7,3 billion

litres per annum.

2. liQUid PetroleUm and Gas demand

2.1 national Refined fuel demand

The following table and graph shows the Southern African refined fuel demand for petrol, diesel and jet fuel for the 30-year planning period supplied from South Africa. Non-pipeline products, eg bitumen, LPG, illuminating paraffin and fuel oil are shown under the

heading ‘Other’.

The demand includes South Africa, Botswana, Lesotho,

Namibia, Swaziland and exports to markets in southern Africa.

The total liquid fuel demand volumes for South African domestic consumption of petrol, diesel and jet fuel are projected to grow from 26 billion litres per annum in 2013 to 69 billion litres per annum by 2043.

The graph on the left below shows the demand per fuel type for the period 2014 to 2043. From the graph below it is evident that the market for diesel is growing while the petrol market remains relatively constant.

Table 1: South Africa and cross-border refined fuel demand, by fuel type (billion litres per annum)

Liquid fuel products 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

Jet 2,6 2,6 2,7 2,8 2,6 2,8 2,9 3,1 3,9 4,9 Diesel 13,6 14,2 14,8 15,5 16,2 16,9 17,7 20,2 31,9 52,5 Petrol 13,5 13,6 13,7 13,8 14,0 14,1 14,2 14,6 16,0 17,6 Other 4,5 4,5 4,5 4,5 4,7 4,6 4,5 4,6 4,8 5,1 Total 34,1 34,9 35,7 36,6 37,5 38,4 39,4 42,5 56,6 80,1 Annual growth 2,8% 2,3% 2,3% 2,4% 2,4% 2,5% 2,5% 2,6% 3,1% 3,7%

The graph on the right below shows the liquid fuel demand (including other products) for South Africa and non-South African supplied from or via South Africa for the period 2014 to 2043.

Figure 4: South Africa and cross-border refined fuel demand, by fuel type

National liquid fuel demand

South Africa and cross-border fuel demand, by fuel type South Africa versus cross-border fuel demand

10 20 30 40 50 60 70 80 90 20 13 20 15 20 17 20 19 20 21 20 23 20 25 20 27 20 29 20 31 20 33 20 35 20 37 20 39 20 41 20 43 Diesel Petrol Jet Other 10 20 30 40 50 60 70 80 90 20 13 20 15 20 17 20 19 20 21 20 23 20 25 20 27 20 29 20 31 20 33 20 35 20 37 20 39 20 41 20 43 Non-SA Demand SA Demand

The inland demand area is defined as per the following figure and tables. Each of the demand enclaves are linked to a demand point being part of the existing oil industry depot infrastructure.

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Figure 5: Inland and coastal demand areas

Inland and coastal demand areas

Figure 6: Crude pipeline demand

Crude oil pipeline demand

Crude oil pipeline

2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

Durban - Sasolburg

5,3

5,5

5,7

5,4

5,5

5,4

5,7

5,3

5,4

5,5

Saldanha Bay - Cape Town

4,8

Total Crude Pipelines

10,1

10,3

10,5

10,2

10,4

10,2

10,5

10,1

10,2

10,3

Annual Growth

3,5% 1,7% 2,6% -3,3% 1,6% -1,0% 2,6% -4,0% 1,2% 0,5%

billion litres per annum

2.3 Refined fuel PiPeline demand national demand forecast

The table and graph below indicate the national demand forecast for petrol, diesel and jet fuel in billion litres per annum for the period 2014 to 2043. The national liquid fuel demand forecast is shown in the table.

Table 3: South Africa refined fuel: Petrol, diesel and jet fuel demand

Liquid fuel products 2014 2015 2020 2025 2030 2035 2040 2043

Jet 2,51 2,57 2,86 3,19 3,57 3,99 4,48 4,81

Diesel 11,91 12,47 15,67 19,75 25,02 31,92 41,15 48,24

Petrol 12,27 12,36 12,86 13,38 13,93 14,52 15,15 15,55

Total 26,69 27,40 31,39 36,32 42,52 50,43 60,79 68,60

Annual growth 3,3% 2,7% 2,9% 3,1% 3,4% 3,7% 4,1% 4,3%

Billion litres per annum.

Figure 7: South Africa refined fuel: Petrol, diesel and jet fuel demand

Refined fuel pipeline demand

2. liQUid PetroleUm and Gas demand

(continued)

The coastal demand area is shown for clarity.

Significantly, Botswana and Lesotho form part of the

inland demand area, while Namibia and Swaziland are

within the coastal demand areas. Botswana, Lesotho,

Swaziland and Namibia are all members of the South

African Customs Union.

Botswana has indicated a change in policy direction

to diversify supply and source fuel via Mozambique and Namibia to improve their security of supply. The impact in the medium-term could see supply from South

Africa to Botswana reduced to less than 60% demand.

Overland exports to northern territories are typically to Zambia, Zimbabwe and Democratic Republic of

the Congo.

2.2 CRude oil PiPeline demand

The table below indicates the long-term forecasted

inland crude demand. The COP from Durban to Sasolburg

supplies Natref, the inland refinery owned by Sasol and Total. It is not expected that the shareholders will increase the refinery capacity beyond its current

nameplate design of 108,7bpd as part of the Clean Fuels 2 (CF2) programme. The current implementation date for CF2 is July 2017. The ability to achieve this date

is compromised due to the funding mechanism for the

CF2 programme not being finalised by Government.

The oil industry requires approximately five years from investment decision to implement the changes at their refineries.

Table 2: Crude oil pipeline − supply and demand − 2014 to 2043

Crude oil pipeline 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

Durban – Sasolburg 5,3 5,5 5,7 5,4 5,5 5,4 5,7 5,3 5,4 5,5

Saldanha Bay

– Cape Town 4,8 4,8 4,8 4,8 4,8 4,8 4,8 4,8 4,8 4,8

Total crude

pipelines 10,1 10,3 10,5 10,2 10,4 10,2 10,5 10,1 10,2 10,3

For the crude oil pipeline from Saldanha Bay to Cape Town, it is assumed that the Chevron refinery will maintain production at current installed capacity for the planning period. The utilisation of the Chevron crude pipeline from Saldanha Bay will

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The growth in petrol consumption is expected to be less than 1% per annum over the period, while diesel growth

is anticipated to be in the 4% to 5% range. Jet fuel consumption remains lower than 2,5% for the period.

inland refined fuel supply and demand forecast

The following table indicates the inland supply and demand for refined fuels for the 30-year period 2013 to 2042. Inland demand includes volumes to Lesotho and

Botswana, but excludes over border exports.

Table 4: Inland refined fuel supply and demand forecast (2014 to 2043)

Billion litres per annum 2014 2015 2020 2025 2030 3035 2040 2042 2043

Total inland demand 18 437 18 944 21 817 25 386 29 889 35 663 43 246 47 141 49 077

Annual growth (%) 3,2 2,7 2,8 3,1 3,3 3,7 3,9 4,5 3,9

Supply from inland refineries 9 080 9 348 9 590 9 520 9 362 9 715 9 659 9 364 9 404

Supply from coast 9 356 9 596 12 227 15 866 20 527 25 948 33 587 37 776 40 673

Supply from coast by road 251 319 299 325 355 1 127 2 588 3 822 3 978

Supply from coast by rail 2 433 3 231 3 054 3 087 3 438 3 830 4 289 4 519 4 840

Supply from coast by pipeline 6 673 6 046 8 873 12 454 16 734 20 991 26 711 29 435 31 855

Total supply to inland 18 437 18 944 21 817 25 386 29 889 35 663 43 246 47 141 49 077

The following graph shows the supply required to satisfy the inland demand. The inland production is supplemented by product from the coast, transported by road, rail and pipelines. The pipeline supply consists of the Durban-Johannesburg Pipeline (DJP), MPP24 and or the NGP.

Figure 8: Inland refined fuel supply and demand forecast (2014 to 2043)

Inland refined fuels supply and demand forecast

billion litres per annum

2014

2015

2020

2025

2030

3035

2040

2042

2043

Total Inland Demand

18 437

18 944

21 817

25 386

29 889

35 663

43 246

47 141

49 077

Annual Growth 3,2% 2,7% 2,8% 3,1% 3,3% 3,7% 3,9% 4,5% 3,9%

Supply from Inland Refineries

9 080

9 348

9 590

9 520

9 362

9 715

9 659

9 364

9 404

Secunda

3 940

3 861

4 178

4 236

4 186

4 113

4 368

4 188

4 113

Natref

5 140

5 487

5 413

5 284

5 176

5 602

5 291

5 177

5 291

Supply from Coast

9 356

9 596

12 227

15 866

20 527

25 948

33 587

37 776

40 673

Supply from Coast by Road

251

319

299

325

355 1 127

2 588

3 822

3 978

Supply from Coast by Rail

2 433

3 231

3 054

3 087

3 438

3 830

4 289

4 519

4 840

Supply from Coast by Pipeline

6 673

6 046

8 873

12 454

16 734

20 991

26 711

29 435

31 855

Total Supply to Inland

18 437

18 944

21 817

25 386

29 889

35 663

43 246

47 141

49 077

The following table shows pipeline utilisation for period 2014 to 2043 for scenario 1 based on the forecasted demand requirements.

Table 5: Refined fuel pipeline demand: Scenario 1 with NGP

Refined fuel pipeline 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

DJP 3,6 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

MPP24 3,1 6,0 6,1 6,8 3,3 3,2 3,2 2,9 6,3 19,7

NGP 0,0 0,0 0,0 0,0 4,6 5,3 5,7 7,9 12,9 11,2

Total 6,7 6,0 6,1 6,8 7,9 8,5 8,9 10,8 19,2 30,9

Figure 9: Refined fuel pipeline demand: Scenario 1 with NGP

Refined fuel pipeline demand

Scenario 1 with NGP

0

5

10

15

20

25

30

35 Ngqura-Gauteng (NGP)

Durban-Gauteng (MPP24)

Durban-Johannesburg (DJP)

Refined fuel pipeline 2013

2014

2015

2016

2017

2018

2019

2020

2023

2033

2043

DJP

3,5

3,6

0,0

MPP24

3,1

6,0

6,1

6,8

3,3

3,2

2,9

6,3

19,7

NGP

0,0

4,6

5,3

5,7

7,9

12,9

11,2

Total

6,7

6,0

6,1

6,8

7,9

8,5

8,9

10,8

19,2

30,9

The following table shows the various pipeline utilisations for the period 2014 to 2043 for scenario 2 based on the forecasted demand requirements.

Table 6: Refined fuel pipeline demand: Scenario 2 with coastal shipping

Refined fuel pipeline 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

DJP 3,6 – – – – – – – – –

MPP24 3,1 6,0 6,1 6,8 7,6 8,2 8,5 10,5 19,0 30,6

NGP 0,0 – – – – – – – – –

Total 6,7 6,0 6,1 6,8 7,6 8,2 8,5 10,5 19,0 30,6

Figure 10: Refined fuel pipeline demand: Scenario 2 with coastal shipping

Refined fuel pipeline demand

Scenario 2 with coastal shipping

0

5

10

15

20

25

30

35 Ngqura-Gauteng (NGP)

Durban-Gauteng (MPP24)

Durban-Johannesburg (DJP)

Refined fuel pipeline

2013

2014

2015

2016

2017

2018

2019

2020

2023

2033

2043

DJP

3,5

3,6

0,0

MPP24

3,1

6,0

6,1

6,8

7,6

8,2

8,5

10,5

19,0

30,6

NGP

0,0

Total

6,7

6,0

6,1

6,8

7,6

8,2

8,5

10,5

19,0

30,6

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Jet fuel demand

The table below indicates the inland jet fuel supply and demand for the 30-year period in billion litres per annum. The various jet fuel supply sources are shown separately and consist of supplies from Natref (Sasolburg) in the dedicated jet fuel pipeline to ORTIA, the supply ex-coast by rail and road, and the demand requirement to be supplemented in the MMP24. The current demand forecast indicates that beyond 2019

the current rail and dedicated Sasolburg pipeline capacity will need to be supplemented to service the inland jet demand. This additional capacity can be supplied by the MPP24, but can be done by either increasing the rail block trains in the short term. It is envisaged that the jet fuel in the MPP24 quality

issue will be resolved by the Clean Fuels 2 introductory

date of 2017.

The Offshore-Mossel Bay pipeline supplies the GTL refinery in Mossel Bay, the Lilly line (Secunda to Durban)

supplies various industrial users and the Temane-Secunda pipeline supplies natural gas feedstock to the Sasol plants in Secunda and Sasolburg and to industrial users as an energy carrier.

Sasol currently delivers more than 120 million giga joules (MGJ) per annum of natural gas or methane-rich gas to customers in Gauteng, Free State, KwaZulu-Natal and Mpumalanga.

Table 7: Jet fuel supply and demand for inland area for the period 2014 to 2043 Billion litres per annum 2014 2015 2016 2017 2018 2019 2020 2021 2022 2032 2042 2043 Jet fuel demand 1,9 1,94 1,98 2,03 2,07 2,12 2,16 2,21 2,26 2,81 3,53 3,61 Demand growth (%) 2,7 2,2 2,2 2,2 2,2 2,2 2,2 2,2 2,2 2,2 2,3 2,3 Jet fuel logistics capacity 2,15 2,15 2,15 7,41 7,41 7,41 7,41 7,41 7,41 7,41 7,41 7,41 Sasolburg-ORTIA avtur line 1,31 1,31 1,31 1,31 1,31 1,31 1,31 1,31 1,31 1,31 1,31 1,31 Durban-ORTIA rail 0,83 0,83 0,83 0,83 0,83 0,83 0,83 0,83 0,83 0,83 0,83 0,83 Road 0,01 0,01 0,01 0,01 0,01 0,01 0,01 0,01 0,01 0,01 0,01 0,01 MPP24-Jameson Park-ORTIA – – – 5,26 5,26 5,26 5,26 5,26 5,26 5,26 5,26 5,26 2.4 gas PiPeline demand

The following table indicates the gas demand in the pipelines to supply the various markets in South Africa:

Table 8: Gas pipeline demand

Gas pipeline 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

Offshore-Mossel Bay (NG) 1 486 1 486 1 486 1 486 1 486 1 486 1 486 1 486 1 486 1 486

Secunda-Durban (MH4) 331 344 361 363 372 382 392 421 538 689

Temane-Secunda (NG) 2 352 2 352 2 352 2 352 2 352 2 352 2 352 2 352 2 352 2 352

Total gas pipelines 4 169 4 182 4 199 4 201 4 210 4 220 4 229 4 258,4 4 376,2 4 527,0

Annual growth (%) 0,3 0,3 0,4 0,0 0,2 0,2 0,2 0,2 0,3 0,4

Million cubic meters pa.

Figure 11: Gas pipeline demand (billion litres per annum)

Gas pipeline demand

Table: Gas pipeline demand

Gas Pipeline

2013

2014

2015

2016

2017

2018

2019

2020

2023

2033

2043

Offshore-Mossel Bay (NG)

1486,0

1486

Secunda - Durban (MH4)

320,0

331

344

361

363

372

382

392

421

538

689 Temane-Secunda (NG)

2351,9

2352

Total Gas Pipelines

4158

4169

4182

4199

4201

4210

4220

4229 4258,4 4376,2 4527,0

Annual Growth

0,3%

0,4%

0,0%

0,2%

0,3%

0,4%

Million Cubic Meters p.a.

The South African gas market is currently small in relation to other energy sources. It does, however, have the potential for significant growth if commercially viable gas discoveries are developed.

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3. PiPeline develoPment Plans

3.1 develoPment sCenaRios

The proposed Mthombo oil refinery at the Port of Ngqura is a Government initiative motivated by concerns about Security of Supply (SoS) of liquid fuels, specifically:

• The Government requires 30% of South Africa’s crude

requirements to be sourced by non-international oil

companies (IOCs);

• Concerns about South Africa’s reduced crude oil

refining capacity; and

• The need for a more involved national oil company (NOC) as an instrument of SoS.

Two pipeline scenarios were developed for the LTPF to support the proposed Mthombo refinery in transporting refined fuel to the hinterland:

• Scenario 1: Transport refined fuel via proposed NGP;

and

• Scenario 2: Ship refined fuel from Ngqura to Durban

and then transport via the MPP24 to Gauteng.

scenario 1: mthombo refinery with ngqura to Gauteng pipeline

This scenario envisages the building of a new pipeline from Ngqura to link into the current network at either

Kroonstad or Jameson Park near Heidelberg, Gauteng.

The new pipeline will be commissioned in the same year that the Mthombo refinery comes online.

The assumption in this scenario is that the Mthombo

refinery will be constructed and commissioned by 2018.

It is currently envisaged that the Mthombo refinery will only be commissioned well into the 2020s. With the implementation of additional refining capacity South Africa will become a net exporter of liquid fuel for a significant period.

This scenario has significant implications for the utilisation and capacity expansion plans of the MPP24

during the next 15 to 20 years. The implications for the

MPP24 are, due to the under-utilisation of existing

capacity for a period of time, that the pipeline tariffs will increase and the current capacity expansion plans would need to be adjusted accordingly.

The building of the Ngqura pipeline does not impact on all of the future MPP24 investments. The investment in TM2 at Jameson Park will still be required to

accommodate the increased demand. Consequently,

only the investments in the additional MPP24 pump stations and TM1 (Island View) will be postponed. The timing of the investment decision and subsequent implementation of the new refinery will impact the investment plan of the MPP24.

scenario 2: mthombo refinery with coastal shipping to durban

Scenario 2 does not include the proposed NGP. This scenario rather assumes that coastal shipping will be used to transport the refined fuel from the port of Ngqura to the port of Durban from where it will be transported in the MPP24 to Gauteng. This will require additional berth capacity at both Ngqura and Durban.

The demand growth and CF2 refinery expansion

assumptions remain for scenario 1.

This scenario assumes the original design expansion plan for the MPP24 subject to demand growth fluctuations.

mthombo impact refined fuels imports

Total liquid fuel volumes moved in and through South Africa are envisaged to grow from the current 34 billion

litres to more than 82 billion litres by 2043. The graph

below illustrates the supply and demand balance. The various demand curves are offset by local production and imports. With a delay in the implementation of Mthombo, the period of over supply would move out in time and oversupply will be reduced, as the market will be able to absorb more local production.

Figure 12: Total liquid fuels supply and demand forecast

Total liquid fuels supply and demand forecast

3.2 new multi-PRoduCt PiPeline

The South African economy depends on the secure supply of fuel into the inland region, where the demand for fuel based on the long-term forecast is growing

from an expected 18,4 billion litres per annum in 2014 to

approximately 49,1 billion litres per annum in 2043. The pipeline also needs to have sufficient spare capacity

to service a major supply disruption from the Coal to Liquids (CTL) plants at Secunda. The MPP24 is replacing the 12 inch DJP and has a capacity of 8,7 billion litres

per annum and at full capacity will be able to deliver 26,3 billion litres per annum.

The MPP24 is aligned with the Energy Security Master Plan of the Department of Energy. The pipeline is

555km and the system consists of a trunk line and two

accumulator terminals, one on either side of the pipeline, ie TM1 in Durban and TM2 at Jameson Park in Gauteng. The coastal terminal (TM1) will receive product from various suppliers in Durban from where it will be injected into the trunk line. The scheduling of the trunk line will be driven by the demand in the off-take areas, the maximisation of batch sizes and the minimisation of the interfaces between products.

The product is received in the inland accumulator terminal (TM2) at Jameson Park from where it is transported into various pipelines to final destination at oil industry storage depots. The inland terminal can also receive product from Natref (Sasolburg) and Sasol 2 and 3 (Secunda). In exceptional cases, products can bypass the inland terminal for direct delivery to industry storage facilities.

For the first phase of the implementation, the MPP24 will have five pump stations − one at TM1, three along the route and one at TM2. Adding additional pump stations to the system can increase capacity.

The interface or intermix will be stored at Jameson Park accumulator terminal (TM2) until a batch can be scheduled to be transported by pipeline for processing at the refractionator at the Tarlton Depot.

The MPP24 was constructed in accordance with best practice in the field of pipeline construction, reflecting the significant advances that have been made over the years in pipeline and construction technology.

The following table show the MPP24 capacity expansion options for the two scenarios:

Table 8: Timing of MPP24 capacity expansion for the two scenarios

Scenario 1:

Ngqura-Gauteng pipeline Coastal shipping to DurbanScenario 2:

MPP24 expansion year (billion litres pa) (billion litres pa)

2010 8,8 8,8 2020 8,8 11,9 2024 8,8 16,9 2030 8,8 22,3 2036 11,9 23,8 2038 11,9 26,3 2039 16,9 26,3 2042 18,3 26,3

The key issues that will impact the timing of the expansions are:

• The inland market demand growth;

• The ability of the inland refineries to supply a minimum base load of fuel;

• The building of a new pipeline from the proposed Mthombo refinery which could delay part of the phase 2 expansion to the 2030 to 2035 period; and

• Security of supply considerations.

It should be noted that based on the timing of the Mthombo refinery decision, only part or the full phase 2 expansion investments will be incurred (TM2 tanks will have to be built as well as the Kroonstad to Sasolburg pipeline leg). It is thus critical that the investment decisions be coordinated at a national level between the government entities involved.

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The following graph shows the utilisation of the MPP24 and NGP (scenario 1) and the impact on the timing of the planned MPP24 expansion phases.

Figure 13: NGP and MPP24 pipeline capacity utilisation for scenario 1

NGP and MPP24 pipeline capacity utilisation for scenario 1

The figure above shows the delayed expansion of the MPP24 as product is transported inland in the new NGP from the Mthombo refinery. During the period until the capacity of the NGP is reached, the MPP24 volume will show a steady decline where after it would pick up and take up the growth in the inland market.

The following table shows the volumes transported in each of the pipelines for the 30-year planning period.

Table 9: Liquid fuel pipeline utilisation DJP, MPP24 and Ngqura

Billion litres per annum 2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

DJP Petrol 3,02 – – – – – – – – – Diesel 0,57 – – – – – – – – – MPP24 Petrol – 2,57 2,58 2,71 1,94 1,92 1,91 1,86 1,69 2,44 Diesel 3,08 3,48 3,56 4,08 1,35 1,26 1,23 0,86 4,11 16,02 Jet – – – – – – 0,03 0,20 0,45 1,23 Total 6,67 6,05 6,14 6,80 3,28 3,18 3,17 2,91 6,25 19,69

Growth from the previous year (%) (2) 10 2 11 (52) (3) 0 (2) 19 9

Coega pipeline Petrol – – – – 1,23 1,45 1,47 1,77 2,98 3,34

Diesel – – – – 3,24 3,67 4,01 5,90 9,48 7,41 Jet – – – – 0,17 0,21 0,22 0,20 0,49 0,41

Total – – – – 4,63 5,33 5,70 7,87 12,95 11,16

Growth from the previous year (%) 15 7 5 1 (2)

The figure below shows the phased expansion of the MPP24 through time as product demand increases and supply is imported through Durban either from Mthombo or other sources (scenario 2).

With the delay in the implementation of the Mthombo refinery now expected well post 2020, it is evident from the below graph that the MPP24 phase 2 expansion will be required before the refinery is built.

This will put additional pressure on a no pipeline scenario for Mthombo as the MPP24 phase 2 will increase capacity to 11,9 billion litres per annum and as indicated in the figure above will be underutilised for at least 10 years until demand growth has caught up with installed capacity.

Figure 14: MPP24 pipeline capacity utilisation for scenario 2

MPP24 pipeline capacity utilisation for scenario 2

3.3 Refined fuel PiPeline netwoRK network diagram

The following two diagrams indicate the schematic layout of the pipeline system for 2014 and 2020. The key difference is the decommissioning of the DJP.

Figure 15: Pipeline network diagram for 2014 and 2020: Scenerio 2Refined fuel pipeline network diagram for 2020

Secunda Durban Ladysmith Bethlehem Kroonstad Sasolburg Coalbrook Langlaagte Tarlton Rustenburg Alrode Airport Waltloo Witbank Kendal Jameson Park Klerksdorp

Refined fuel pipeline network diagram for 2014

Durban Ladysmith Bethlehem Kroonstad Sasolburg Coalbrook Secunda Langlaagte Tarlton Rustenburg Alrode Airport Waltloo Witbank Kendal Jameson Park Klerksdorp

2014 Pipeline system 2020 Pipeline system

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network utilisation

The following diagrams indicate the pipeline utilisation for the various liquid fuels pipelines in the network for 2014, 2034 and 2043 based on average monthly pipeline demand.

Figure 16: Network utilisation for 2014 based on average monthly pipeline demand: Scenario 2

Refined fuel pipeline utilisation for 2014

Durban Ladysmith Bethlehem Kroonstad Sasolburg Coalbrook Secunda Langlaagt e Tarlto n Rustenbur g Alrode Airport Waltloo Witbank Kendal Jameson Park Klerksdorp 100 % % 18 15% 26% 19% 19% 1% (petrol) 20% (diesel) 49% 22% 1% 89% 71% 67%

Note that in the 2034 diagram the MPP24 pipeline is running more that 80% of capacity and in 2043, the Jameson Park –

Kendal line section, Tarlton − Rustenburg line section and the MPP24 exceed the installed capacity.

Refined fuel pipeline utilisation for 2034

Refined fuel pipeline utilisation for 2043

Durban Ladysmith Bethlehem Kroonstad Sasolburg Coalbrook Secunda Langlaagt e Tarlto n Rustenbur g Alrode Airport Waltloo Witbank Kendal Jameson Park Klerksdorp 114 % 124 % 48% 50% 47% (petrol) 96% (diesel) 77% 90% 0% 30% multi-product Pipeline

The following diagrams indicate the pipeline utilisation through time (2014 to 2043) and show when the regional sections of the pipeline network become constrained. The average and peak seasonal demand is shown for the MPP24 (trunk line) and the utilisation for average demand in the eastern, western and northern sections of the pipeline system. Each pipeline section is shown separately for the various network regions.

Figure 19: MPP24 trunk line and Ngqura pipeline capacity utilisation: Scenario 1

MPP24 trunk line and Ngqura Pipeline capacity utilisation

Scenario 1 and Scenario 2

Average Demand

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 1% -59% 50%

NMPP 36% 69% 78% 36% 25% 21% 15% 9% 10% 17% 24% 31% 40% 51% 61% 75% 60% -79% 61%

Coega Pipeline 0% 0% 0% 61% 78% 60% 75% 81% 86% 88% 87% 85% 84% 82% 79% 75% 80%-100% 85%

>100% 101%

Peak Seasonal Demand

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 MPP24 44% 81% 92% 42% 29% 23% 16% 9% 11% 20% 28% 37% 48% 61% 74% 90% Coega Pipeline 0% 0% 0% 72% 93% 72% 90% 97% 104% 105% 104% 101% 100% 97% 93% 89% Average Demand PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 1% -59% 50% MPP24 36% 69% 78% 93% 78% 75% 70% 53% 58% 66% 72% 79% 87% 96% 105% 116% 60% -79% 61% 80%-100% 85%

Peak Seasonal Demand >100% #####

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043

MPP24 44% 81% 92% 110% 92% 88% 82% 63% 68% 78% 86% 94% 104% 115% 125% 139%

Regular pipeline expansions (additional pump stations and tanks) are scheduled for the MPP24 to alleviate any constraints

that might occur. The pipeline only becomes constrained for scenario 2 in 2042 and 2038 for the peak demand case.

Figure 20: MPP24 trunk line capacity utilisation: Scenario 2

MPP24 trunk line and Ngqura Pipeline capacity utilisation

Scenario 1 and Scenario 2

Average Demand

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 1% -59% 50%

NMPP 36% 69% 78% 36% 25% 21% 15% 9% 10% 17% 24% 31% 40% 51% 61% 75% 60% -79% 61%

Coega Pipeline 0% 0% 0% 61% 78% 60% 75% 81% 86% 88% 87% 85% 84% 82% 79% 75% 80%-100% 85%

>100% 101%

Peak Seasonal Demand

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 MPP24 44% 81% 92% 42% 29% 23% 16% 9% 11% 20% 28% 37% 48% 61% 74% 90% Coega Pipeline 0% 0% 0% 72% 93% 72% 90% 97% 104% 105% 104% 101% 100% 97% 93% 89% Average Demand PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 1% -59% 50% MPP24 36% 69% 78% 93% 78% 75% 70% 53% 58% 66% 72% 79% 87% 96% 105% 116% 60% -79% 61% 80%-100% 85%

Peak Seasonal Demand >100% #####

MPP24 44% 81% 92% 110% 92% 88% 82% 63% 68% 78% 86% 94% 104% 115% 125% 139%

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eastern network

The eastern network comprises pipelines running from Secunda to Jameson Park, to Kendal node and onto Waltloo and Witbank.

Figure 21: Eastern network − refined products (average demand)

Refined products (average and peak demand)

Eastern network

1% -59% 50%

Refined Products Eastern Network

60% -79% 61%

80%-100% 85% Pipeline Section Design Capacity Utilisation - Average Demand >100% 101%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Secunda-Kendal (20") 25% 25% 25% 22% 22% 21% 21% 20% 20% 19% 20% 19% 19% 18% 18% 17% Secunda-Kendal (12") 15% 14% 13% 9% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Jameson Park-Kendal 14% 16% 20% 30% 37% 46% 50% 57% 63% 70% 77% 87% 97% 97% 120% 126% Secunda-Jameson Park 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Kendal Waltloo 31% 33% 36% 38% 41% 44% 47% 50% 54% 59% 59% 69% 75% 76% 79% 97% Kendal-Witbank 23% 21% 23% 28% 32% 36% 39% 43% 47% 50% 55% 60% 67% 74% 82% 90% 1% -59% 50%

Refined Products Eastern Network

60% -79% 61%

80%-100% 85% Pipeline Section Design Capacity Utilisation - Peak Demand >100% 101%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Secunda-Kendal (20") 27% 27% 27% 24% 24% 23% 23% 22% 22% 21% 22% 20% 21% 19% 20% 18% Secunda-Kendal (12") 19% 17% 16% 11% 6% 12% 8% 0% 0% 0% 0% 0% 0% 0% 0% 0% Jameson Park-Kendal 17% 20% 25% 36% 45% 56% 61% 69% 76% 79% 94% 99% 117% 131% 146% 154% Secunda-Jameson Park 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Kendal Waltloo 36% 39% 41% 44% 47% 51% 55% 59% 64% 69% 75% 76% 79% 97% 99% 99% Kendal-Witbank 27% 26% 28% 33% 39% 43% 47% 51% 56% 61% 66% 73% 82% 90% 100% 110%

Refined products (average and peak demand)

Eastern network

1% -59% 50%

Refined Products Eastern Network

60% -79% 61%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Secunda-Kendal (20") 25% 25% 25% 22% 22% 21% 21% 20% 20% 19% 20% 19% 19% 18% 18% 17% Secunda-Kendal (12") 15% 14% 13% 9% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Jameson Park-Kendal 14% 16% 20% 30% 37% 46% 50% 57% 63% 70% 77% 87% 97% 97% 120% 126% Secunda-Jameson Park 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Kendal Waltloo 31% 33% 36% 38% 41% 44% 47% 50% 54% 59% 59% 69% 75% 76% 79% 97% Kendal-Witbank 23% 21% 23% 28% 32% 36% 39% 43% 47% 50% 55% 60% 67% 74% 82% 90% 1% -59% 50%

Refined Products Eastern Network

60% -79% 61%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Secunda-Kendal (20") 27% 27% 27% 24% 24% 23% 23% 22% 22% 21% 22% 20% 21% 19% 20% 18% Secunda-Kendal (12") 19% 17% 16% 11% 6% 12% 8% 0% 0% 0% 0% 0% 0% 0% 0% 0% Jameson Park-Kendal 17% 20% 25% 36% 45% 56% 61% 69% 76% 79% 94% 99% 117% 131% 146% 154% Secunda-Jameson Park 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Kendal Waltloo 36% 39% 41% 44% 47% 51% 55% 59% 64% 69% 75% 76% 79% 97% 99% 99% Kendal-Witbank 27% 26% 28% 33% 39% 43% 47% 51% 56% 61% 66% 73% 82% 90% 100% 110%

The eastern network will only experience capacity constraints towards 2040.

western network

The western network comprises pipelines running from Natref in Sasolburg to Jameson Park, south to Kroonstad and west to Klerksdorp. It also includes the dedicated Avtur pipeline.

Figure 22: Western network − refined products (average demand)

Refined products (average and peak demand)

Western network

1% -59% 50%

Refined Products Western Network

60% -79% 61%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Natref-Kroonstad 0% 22% 22% 15% 15% 15% 16% 16% 17% 17% 18% 19% 19% 20% 21% 22% Natref-Klerksdorp 48% 50% 51% 53% 54% 55% 57% 59% 61% 62% 64% 66% 69% 71% 74% 77% Natref-Ortia (Avtur) 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% Natref-Jameson Park 12% 33% 31% 34% 30% 38% 25% 16% 20% 16% 15% 19% 16% 15% 18% 15% Jameson Park-Natref 0% 0% 0% 0% 0% 0% 0% 3% 3% 17% 18% 19% 20% 21% 22% 23% 1% -59% 50%

Refined Products Western Network

60% -79% 61%

Natref-Kroonstad 0% 26% 26% 17% 18% 18% 19% 19% 20% 21% 22% 22% 23% 25% 26% 27%

Natref-Klerksdorp 57% 59% 60% 62% 64% 66% 68% 70% 72% 74% 76% 79% 82% 85% 88% 92%

Natref-Ortia (Avtur) 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85%

Natref-Jameson Park

Refined products (average and peak demand)

Western network

1% -59% 50%

Refined Products Western Network

60% -79% 61%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Natref-Kroonstad 0% 22% 22% 15% 15% 15% 16% 16% 17% 17% 18% 19% 19% 20% 21% 22% Natref-Klerksdorp 48% 50% 51% 53% 54% 55% 57% 59% 61% 62% 64% 66% 69% 71% 74% 77% Natref-Ortia (Avtur) 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% Natref-Jameson Park 12% 33% 31% 34% 30% 38% 25% 16% 20% 16% 15% 19% 16% 15% 18% 15% Jameson Park-Natref 0% 0% 0% 0% 0% 0% 0% 3% 3% 17% 18% 19% 20% 21% 22% 23% 1% -59% 50%

Refined Products Western Network

60% -79% 61%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Natref-Kroonstad 0% 26% 26% 17% 18% 18% 19% 19% 20% 21% 22% 22% 23% 25% 26% 27% Natref-Klerksdorp 57% 59% 60% 62% 64% 66% 68% 70% 72% 74% 76% 79% 82% 85% 88% 92% Natref-Ortia (Avtur) 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% Natref-Jameson Park 14% 38% 36% 40% 34% 45% 28% 18% 21% 18% 17% 20% 17% 16% 20% 16% Jameson Park-Natref northern network

The northern network comprises the pipeline running from Jameson Park though the Alrode node to Rustenburg and OR Tambo International Airport (ORTIA).

Figure 23: Northern network − refined products (average demand)

Refined products (average and peak demand)

Northern network

1% -59% 50%

Refined Products Northern Network

60% -79% 61%

Jameson Park-Ortio (Jet) 0% 0% 0% 4% 6% 7% 9% 11% 13% 16% 18% 20% 23% 25% 28% 31%

Jameson Park-Alrode (Petrol) 3% 36% 36% 37% 38% 39% 39% 40% 41% 42% 43% 43% 44% 45% 46% 47%

Jameson Park-Alrode (Diesel) 19% 21% 23% 26% 28% 32% 35% 39% 44% 49% 55% 61% 68% 77% 86% 96%

Alrode Langlaagte 19% 19% 19% 20% 22% 23% 25% 27% 29% 31% 33% 35% 38% 42% 46% 50%

Langlaagte Tarlton 19% 18% 18% 19% 21% 22% 24% 26% 27% 29% 32% 34% 37% 40% 44% 48%

Tarlton Rustenburg 24% 27% 30% 33% 37% 41% 45% 51% 56% 62% 69% 78% 87% 98% 109% 124%

1% -59% 50%

Refined Products Northern Network

60% -79% 61%

Jameson Park-Ortia (Jet) 0% 0% 0% 5% 7% 9% 11% 13% 16% 18% 21% 24% 27% 30% 33% 37%

Refined products (average and peak demand)

Northern network

1% -59% 50%

Refined Products Northern Network

60% -79% 61%

Jameson Park-Ortio (Jet) 0% 0% 0% 4% 6% 7% 9% 11% 13% 16% 18% 20% 23% 25% 28% 31%

1% -59% 50%

Refined Products Northern Network

60% -79% 61%

Jameson Park-Ortia (Jet) 0% 0% 0% 5% 7% 9% 11% 13% 16% 18% 21% 24% 27% 30% 33% 37%

Tarlton Rustenburg 28% 32% 35% 39% 44% 49% 54% 60% 67% 75% 83% 94% 105% 118% 132% 150% The northern network has sufficient capacity until 2035, where after the Tarlton-Rustenburg section requires additional

capacity.

Jet fuel pipeline

The following diagrams indicate the schematic layout and capacity of the jet fuel pipelines inland for 2013 and 2020. Note the addition of the dedicated jet fuel pipeline from Jameson Park to ORTIA to supplement jet fuel supply by pipeline from the coast.

Figure 24: Jet fuel pipeline schematic layout for 2014 and 2020

Jet Fuel Pipeline schematic layout for 2014 and 2020

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Figure 25: Jet fuel pipeline capacity utilisation 2014 to 2043

Jet fuel pipeline capacity utilisation

The following diagram indicates the jet fuel pipeline utilisation for the 2014, 2024, 2034 and 2043:

Figure 26: Jet fuel pipeline utilisation 2014 to 2043

Jet fuel pipeline capacity utilisation

The current dedicated jet fuel pipeline from Sasolburg will continue to be run at full capacity for the 30-year planning period with increased volumes through time in the MPP24.

A key issue for the transport of jet fuel in the MPP24 is the compliance to the CF2 product specification. Jet fuel has high

sulphur content and hence a technical solution needs to be found within the next two years to transport jet fuel and very low sulphur (10ppm) refined products in the MPP24. The below figure depicts the options to manage the impact on jet fuel to ORTIA.

Figure 27: Option to manage jet fuel from Durban to ORTIA

Option to manage jet fuel from Durban to ORTIA

Move back to rail

DJP Life End or if in MPP24 if Sulphur quality issue not resolved Impact loading,

Find solution Jet in MPP24

MPP 24

RAIL

JET in MPP24 until CF2

2017

2014

Maintain minimum rail capability

Options for managing jet fuel ex coast into ORTIA

1. Transport Jet in MPP24 and find solution for quality before CF2 else move to

2. Use DJP until CF2 or end of life date whichever is earlier and then move back to rail or MPP24 if quality solution found.

Pipeline utilisation map 2014 Pipeline utilisation map 2024

The introduction of biofuels in 2015 will require mitigating measures to ensure that there is no cross contamination of jet fuel

with fatty acid methyl ester (FAME) when transported in MPP24.

The building of a jet fuel pipeline to supply the King Shaka International Airport (KSIA) at La Mercy in Durban should be

investigated in future when demand increases to warrant the capital investment. Current demand at the airport is low and jet

fuel is supplied by road tankers.

3.4 CRude oil PiPeline

The diagram below indicates the crude oil pipeline system. Although the section from Vrede to Secunda was part of the original system to Ogies (near Kendal) it is currently not in service. The various line sections, diameters and flow rates are shown in the adjacent table.

Figure 28: Crude oil pipeline schematic and pipeline information

Crude oil pipeline schematic and utilisation map

1% -59% 50%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 60% -79% 61%

Fynland-Newcastle 71% 67% 74% 73% 74% 72% 74% 73% 74% 74% 74% 74% 74% 74% 74% 80%-100% 85%

Newcastle-Coalbrook 71% 67% 74% 73% 74% 72% 74% 73% 74% 74% 74% 74% 74% 74% 74% >100% 101%

The capacity utilisation map below indicates that sufficient capacity exists in the system for the 30-year planning period.

Figure 29: Crude oil pipeline capacity utilisation map

Crude oil pipeline schematic and utilisation map

1% -59% 50%

PIPELINE SECTION 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 60% -79% 61%

Fynland-Newcastle 71% 67% 74% 73% 74% 72% 74% 73% 74% 74% 74% 74% 74% 74% 74% 80%-100% 85%

Newcastle-Coalbrook 71% 67% 74% 73% 74% 72% 74% 73% 74% 74% 74% 74% 74% 74% 74% >100% 101%

3.5 gas PiPeline

Sasol’s natural gas is supplied via the 865km ROMPCO natural gas transmission pipeline from the Pande and Temane Gas Field in Mozambique, to Sasol’s plants in Secunda and Sasolburg. The pipeline is 50% owned by Sasol, 25% by the South African Government (CEF) and the other 25% by the Mozambique Government.

During 2010, construction of a new compressor station was completed at Komatipoort on the border of Mozambique and South Africa. The new station increases capacity by approximately 7MGJ per annum. In 2012 Sasol applied for tariffs for an additional 27MGJ per annum to be delivered to customers. The ramp up to 147MGJ will be done over a seven-year period.

3. PiPeline develoPment Plans

(continued)

Option for managing jet fuel ex coast into ORTIA

1. Transport jet in MPP24 and find a solution for quality before CF2 els move to Rail (clean-up issues

thereafter...)

2. Use DJP until CF2 or end of life date whichever is earlier and then move back to rail or MPP24 if

Pipeline development. Foreword

Foreword

PiPeline

develoPment

Plan

1. introdUCtion

table oF Contents

1. introdUCtion

(continued)

National pipelines network

Transnet’s pipelines network

Transnet’s pipelines network

1. introdUCtion

(continued)

2. liQUid PetroleUm and Gas demand

National liquid fuel demand

Inland and coastal demand areas

Crude oil pipeline demand

Crude oil pipeline

2014 2015 2016 2017 2018 2019 2020 2023 2033 2043

Durban - Sasolburg

5,3

5,5

5,7

5,4

5,5

5,4

5,7

5,3

5,4

5,5

Saldanha Bay - Cape Town

4,8

4,8

4,8

4,8

4,8

4,8

4,8

4,8

4,8

4,8

Total Crude Pipelines

10,1

10,3

10,5

10,2

10,4

10,2

10,5

10,1

10,2

10,3

Annual Growth

3,5% 1,7% 2,6% -3,3% 1,6% -1,0% 2,6% -4,0% 1,2% 0,5%

billion litres per annum

Refined fuel pipeline demand

2. liQUid PetroleUm and Gas demand

(continued)

Inland refined fuels supply and demand forecast

2014

2015

2020

2025

2030

3035

2040

2042

2043

Total Inland Demand

18 437

18 944

21 817

25 386

29 889

35 663

43 246

47 141

49 077

Supply from Inland Refineries