West Coast Economy set to rise, Thanks to Oil
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West Coast Economy set to rise, Thanks to Oil
Oil Storage is on the rise. The place to be is right here on the West Coast. Not since the 1970s has South Africa seen such a substantial increase in Oil storage facilities and linked foreign investment. After the environmental impact studies were completed the building process was allowed to begin. Whispers of economic development have been looming ever since, but no-one has quite felt the benefit of it all yet, except maybe the building contractors.
But as we have seen in the past like with other the big industries like steel & iron ore, the economic growth does follow. Today thousands of people and businesses from Langebaan, Saldanha, Vredenburg and beyond rely on the economic ripple. We must be patient, but it is also good to prepare. We can see the roads are being widened in preparation for a West Coast Economic Boom. By mid 2019 many cornerstone projects are set to be completed.
This is an extract from the Fin24 article Africa’s hidden oil hub near Cape Town booms after making millions for traders earlier this year:
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“Saldanha could have turned into a white elephant, but it held an unforeseen commercial potential. When a price structure known as contango emerged in the oil market, traders were able to lock in profits by storing crude for future delivery to buyers elsewhere. This happened in 2009 and again four years ago, when companies from Mercuria Energy Group to Vitol Group used the site.
While those opportunities have evaporated as oil rebounded, the strategic importance of the shipping route around the Cape of Good Hope has grown.
“There’s nothing that really compares with Saldanha Bay,” said Joe Willis, a senior research analyst at Wood Mackenzie Ltd, who highlights its accessibility to supertankers plying an ocean highway that connects key markets in Asia, Europe and the Americas. “It’s quite unique in its own right.”
Capacity gains
Saldanha is currently able to hold as much as 45 million barrels, enough to fill more than 20 large tankers. By comparison, Cushing, the better-known US oil storage centre in Oklahoma that serves as the pricing point for the West Texas Intermediate oil benchmark, can hold about 75 million barrels.
The capacity of Saldanha will grow by almost 30% with the addition of more than 13 million barrels of storage and blending facilities by the end of next year, according to a joint venture of Hamburg-based Oiltanking GmbH, the world’s second-biggest independent crude storage provider, and local company MOGS.
