SouthAfrica.info (Johannesburg)

17 January 2014

South Africa: Saldhana Bay IDZ 'Drawing Strong Investor Interest'

The Saldanha Bay Industrial Development Zone, launched late last year, is already drawing strong international interest, with several lease agreements signed and a surge of global oil and gas companies negotiating joint ventures with South African firms, the Western Cape provincial government said on Thursday.

"The Saldanha Bay IDZ Licencing Company has signed six lease agreements with international and South African oil and gas companies," Western Cape Finance, Economic Development and Tourism Minister Alan Winde said in a statement.

"These include firms specialising in oilfield services, oil rig operations, logistics operators, ship repair, engineering and market support."

Final negotiations for lease agreements are taking place between the Licencing Company and two international oilfield service companies and a South African rig repair firm, Winde said.

"In some of the most exciting developments, the Licencing Company is in talks with an international consortium to develop a rig module building facility. We are also aware of a R200-million investment by a global oil servicing company which is set to create 300 jobs. Several leading international companies are increasing their staff numbers in their South African companies."

Winde said details on individual companies were bound by non-disclosure agreements and could not be released at this stage.

African oil, gas service and supply hub

A feasibility study conducted by the Department of Trade and Industry found that Saldanha Bay is strategically located to serve as a service, maintenance, fabrication and supply hub for the booming African oil and gas sector, due to the increasing number of oil rigs requiring maintenance, and their traffic flow passing from the west to the east coast of Africa.

In October last year, German company Oiltanking GmbH entered a joint venture with a number of South African companies to build a commercial crude oil storage and blending terminal at the port of Saldanha.

The company said that Saldanha was an excellent location for a crude oil hub, "as it is close to strategic tanker routes from key oil-producing regions to major oil-consuming markets".

Ideally situated for the blending of west African and South American crude oils, Saldanha "has the potential to establish itself as a global crude transhipment hub focused on certain established trade routes," the company added.

The Western Cape government has invested R25-million over five years in setting up the industrial development zone (IDZ).

"This is the culmination of years of collaboration between all spheres of government and the Saldanha Bay community," Winde said.

"The IDZ has the potential to become one of the most important levers for jobs and economic growth for the Western Cape. Early indications are that it will indeed be a major catalyst for foreign direct investment and increased employment opportunities for our residents in the medium to long term."

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