Nersa Patrick Mabuza

STABILISING LPG SUPPLY IN SOUTHERN AFRICA CONFERENCE 14 March 2012 Southern Sun O.R. Tambo International Gauteng By Patrick Mabuza 1

Regulation of LPGOutline• Who Regulates What?• Introduction to NERSA• How does NERSA Regulate LPG• Examples – Licensed LPG Facilities• Licensing Process• Licence Conditions – Tariffs – Reporting 2

WHO REGULATES WHAT?Upstream Refining Transmission Wholesaling Storage RetailingPetroleum Dept of NERSA Dept ofAgency Energy Energy

INTRODUCTION TO NERSA

• November 2005 – Commencement• Economic regulator – Electricity (took over from NER) – Piped Gas – Petroleum Pipelines (includes storage and marine loading facilities)• Public hearings/ written submission• Written decisions and reasons for decision

• 3 different Acts• Electricity and petroleum pipelines treated as established industries• Gas treated as an infant industry – less onerous regulation

HOW DOES NERSA REGULATE LPG

Petroleum Pipelines Act (PPA)• “petroleum” - crude oil and petroleum products;• “petroleum products” - any liquid petroleum fuel and any lubricant, whether used or unused, and includes any other substance which will be used for a purpose for which petroleum fuel or any lubricant may be used 8

Licensing LPG Activities• Construction, operation and conversion of facilities – Pipelines for the transportation of LPG; – Storage facilities for LPG – Loading facilities for LPG Located in harbour. 9

LPG Facilities excluded (1)• Pipelines located on premises of – a manufacturer of petroleum products; – a storage facility; – a retailer of petroleum products; – an agricultural cooperative 10

LPG Facilities excluded (2)• Storage facilities – Integral part of manufacturing process; – for own final use; – used for the retailing of products to the public; – used by an agricultural cooperative exclusively for its members; and – used to transport petroleum by road, rail, sea and air 11

EXAMPLES – LICENSED LPG FACILITIES 12

LPG Facilities Licensed (1)• Sunrise Energy Terminal (Saldanha Bay)- construction phase – Construction of loading facility and storage – Loading & Storage connected by pipeline (3km undersea & 1.8 km overland) – To be used for importation of LPG (5 000 – 7 000 metric tons per month) – Transported out of facility by road & rail 13

LPG Facilities Licensed (2)• Easigas – Sidwell, PE Facility –Operational storage facility – 315 m3 capacity – 4 horizontal cylindrical tanks –LPG into via road &rail from SAPREF & PetroSA –Out via road, reticulation network & cylinders 14

LPG Facilities Licensed (3)• Island View Storage Richards Bay –operational facility –Operation - storage facility – 6 000m3 capacity –In, via marine loading facility –Out, via road and rail 15

LPG Facilities Licensed (4)• Montague Gardens (mixed facility) –Operation - storage facility – 90m3 capacity (2 tanks) –In via rail loading facility –Out via road 16

LICENSING PROCESS

The PPA• Sections 15 - 19 – Pre licensing discussion with NERSA allowed – Contents of the application • Incl. administrative, technical & financial abilities • Confidential requests – Application Notice published by applicant • 30 days viewing period – Amendment of application at direction of NERSA – Finalisation of application – 60 days – Separate or combined licenses 18

The PPA Rules• Rules 1 – 12 – Hand delivery/ registered post and electronically – 2 copies – Indexed & paginated• Annexure A - confidentiality request• Annexure B - Application for licence• Annexure C - notice of incomplete application 19

LICENCE CONDITIONS 20

The PPA RulesSection 20(1) – RRM – Common carrier for pipeline – proportionate usage – 3rd party access to loading – proportionate usage – 3rd party access to storage • uncommitted capacity • allocation mechanism – Approve/ set tariffs – Reporting• Section 20(2) – amendment of conditions 21

Thank youwww.nersa.org.za 22

Nersa Patrick Mabuza

by Nigel Brown

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