In a significant move to fortify South Africa’s fuel supply chain, Vivo Energy, the African downstream division of global commodities trader Vitol, has announced a $130 million investment to expand fuel storage capacity in Durban. This strategic investment comes as South Africa grapples with the closure of nearly half of its refining capacity in recent years, making it increasingly reliant on fuel imports.
The expansion, situated on a former refinery site, is poised to add approximately 300,000 cubic meters of storage capacity to the region. Completion is anticipated by the third quarter of 2027. This development complements ongoing efforts to renovate an additional 200,000 cubic meters at the nearby Island View terminal, further enhancing the region’s fuel storage infrastructure.
South Africa’s refining landscape has undergone a dramatic transformation over the past decade, with several plants shutting down amidst operational and economic hurdles.
The conversion of facilities like the Engen refinery in Durban into storage terminals has elevated the importance of storage and logistics in meeting domestic fuel demand. George Roberts, CEO of Engen, Vivo Energy’s South African unit, emphasized the investment’s focus on enhancing supply flexibility, stating, “Long-term infrastructure in place makes the system more resilient to supply shocks.”.
The new storage capacity will enable South Africa to amass larger fuel reserves locally, providing importers with additional time to secure alternative supplies in the event of disruptions.
The typical shipping time for fuel to South Africa ranges from 20 to 25 days, depending on the origin, underscoring the significance of the new storage infrastructure in ensuring a stable supply. Vivo Energy’s investment in Durban reflects a broader trend across Africa, where investment is shifting towards storage and distribution as refining capacity diminishes and demand persists.
The company has been proactive in expanding its storage footprint, including investments in LPG and refined fuel infrastructure in Ivory Coast, Senegal, and Morocco. Moreover, Vivo Energy has upgraded depot assets in Tanzania and is exploring additional opportunities.
In Durban, Vivo Energy is also engaged in discussions with the South African government and partners regarding a proposed gas — to-power project at the site.
However, the project is contingent upon regulatory approvals. This expansion underscores the critical role of storage infrastructure in supporting energy supply in import-dependent markets, a trend set to continue as the global energy landscape evolves.
*Additional reporting by ImNews | Sources consulted: 5*
—
By This original article was produced by the ImNews editorial team
Source: Africa.businessinsider
Source: Ayodeji Adegboyega
