South Africa’s Transnet Keeps Pipeline Theft Down, Raises Profits - Africa’s premier report on the oil, gas and energy landscape.

South Africa’s Transnet Keeps Pipeline Theft Down, Raises Profits

By Toyin Akinosho, Publisher

Transnet, the South African state-owned logistics company says the annual revenue of its Pipelines unit was 7% above budget and operating expenditure was maintained well below the budget, resulting in EBITDA being 27% above budget in the 2023 financial year.

Transnet’s Pipeline Unit, simply called ‘Pipelines’, operates and maintains a 3,114 kilometre high-pressure petroleum and gas pipeline network in South Africa. The flagship infrastructure of that network includes the 715 kilometre long, multiproduct pipeline (MPP) to transport petrol, diesel and jet fuel from Durban to Gauteng as well as the 600 kilometre, 16-inch Secunda–Durban natural gas pipeline.

“Pipelines made significant progress in reducing fuel theft incidents in 2023. Pipelines achieved an 8.6% reduction in product loss due to theft incidents in 2023, when compared to the prior year, despite the number of fuel theft incidents increasing in 2023”, the company explains.

Transnet then claims that “the implementation of long-term holistic, sustainable solutions as well as ongoing engagements with all stakeholders to curb the number of incidents yielded positive results as fuel theft incidents reduced by 63% in the second half of the year when compared to the first six months”.

The targeted volume and actual deliveries for the 2023 financial year include:

–Targeted Total Petroleum volume: 15 432Million litres; Achieved volume:  15,500Million litres.

– Targeted Natural gas volume: 533Million cubic metres (or ~18.8Billion cubic feet) ; Achieved volume:  516Million cubic metres (or ~18.2Billion cubic feet).

Transnet Pipelines considers product theft along its pipelines as one of the company’s top risks, as, the company says:

  • It has adverse impact on Pipelines’ reputation and brand due to negative media coverage associated with the theft of product incidents
  • Loss of volumes as a result of product theft negatively impacts volume and revenue objectives

The product theft incidents caused interruptions on the pipeline operations, however, Pipelines continued to ensure security of fuel supply to the inland market.

The company also considers, as a high risk, the failure of certain parts of the Durban-Johannesburg Pipeline (Sasolburg to Kroonstad and Alrode to OR Tambo International Airport) due to inherent defects in the line.

Transnet expects to continue to implement the Pipeline Security Strategy to ensure safe operations and minimise the impact of fuel theft on the operational and financial performances.

It also wants to “fast-track the environmental remediation backlog to comply with relevant and applicable environmental legislation while maintaining organisational sustainability”.

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