Page 9 - AfrElec Week 27

AfrElec GAS-FIRED GENERATION AfrElec

Sasol to shed stake in Nigerian GTL plant

NIGERIA SOUTH Africa’s Sasol has struck a deal to sell its with a 70% stake, while NNPC has 20%. But the
indirect 10% stake in the Escravos gas-to-liquids US major agreed in December to transfer most
(GTL) plant in Nigeria to its US partner Chevron of its stake over to NNPC as part of a cost dispute
as part of a broader divestment programme. resolution.
Sasol is looking to curb its debt to strengthen Sasol has several sales planned. It is collect-
its financial position during the downturn. In a ing binding offers for its 50% stake in a pipe-
statement on July 1, the company said the sale at line that supplies South Africa with gas from
Escravos would free it from various obligations, Mozambique. The bidding phase for the 865-km
including guarantees. It did not name a sales Rompco pipeline, which ships gas from onshore
price, nor say when it expected to close the deal. fields in Pande and Temane, will wrap up in late
But it did say it would continue to support Chev- July, according to Bloomberg.
ron at the plant by supplying catalysts, technol- The remaining interest in the pipeline is split
ogy and technical support. equally between the South African and Mozam-
The transaction will be backdated to Septem- bican governments.
ber 1, 2019. Sasol is also looking to dispose of the Cen-
The Escravos GTL plant entered operations tral Termica de Ressano Garcia (CTRG) power
in 2014 and uses up to 3.36bn cubic metres of plant, which receives gas from Rompco, and is in
gas per year to produce 34,000 barrels of syn- “far advanced” talks to find a partner for its base
thetic diesel, naphtha and liquefied petroleum chemicals operations in the US. Sasol added in its
gas (LPG). Gas supply comes from the offshore statement this week it had sold a 51% stake in an
OML 90 block, operated by Chevron and Nige- explosives joint venture to its partner Enaex. The
rian National Petroleum Corp. (NNPC). pair formed the venture last year.
The GTL project has a chequered past of cost There were reports in May that Sasol was
overruns and delays, with its eventual expense negotiating the sale of its fuel retail operations to
reaching $10bn – four times more than the origi- South Africa’s state-owned Central Energy Fund
nal budget. Chevron currently operates the plant (CEF), but the companies have denied this.™

FUELS

South African court scraps fuel tender

SOUTH AFRICA THE North Gauteng high court in Pretoria has scandal, the court said. The city tried to claim a
cancelled a controversial tender for fuel supplies judicial review of the contest was unnecessary,
to the city after identifying irregularities. hiring EY to carry out a forensic investigation.
One of the three companies that won the But the court said there no purpose in delaying a
tender in January last year funnelled cash into rule until EY had finished its work.
accounts linked to the head of Economic Free- The tender documents asked companies to
dom Fighters (EFF), Julius Malema, and the provide quotes for six types of fuel, even though
political party’s secretary-general, Marshall Pretoria needs only two. BBT charged low prices
Dlamini, according to an investigation published for the four unneeded grades but high prices for
last year by amaBhungane. the other two. City authorities then added up the
Judge Windell ordered the tender to be can- prices and concluded that BBT had the strongest
celled after a case was launched by a company bid – a process that Windell said was “irrational
called Q Tique 27, which took part in the contest and procedurally unfair.”
but said it did not know there had been award The city then overpaid for the fuel it did
until amaBhungane’s report. receive, which the court said was owing to an
The tender resulted in contracts being signed administrative error. Once again, the overpay-
with Balimi Barui Trading (BBT), Rheinland ments stopped when amaBhungane’s report was
Investments and MDZ Fleet Solutions. BBT, published.
which held an existing fuel contract with the The judge found that BBT’s director, Hendrik
city, paid ZAR15mn ($880,000) to companies Kganyago, was related to a senior official in the
tied to Malema and Dlamini between mid-2018, city’s fleet division, Stanley Kganyago.
when the tender was first advertised, right up to “The less I say about the relationship between
when amaBhungane’s investigation came out in Mr Hendrick Kganyago and Stanley Kganyago
September. at this stage the better,” he said, noting that the
Pretoria, otherwise known as Tshwane, over- forensic investigation by EY could lead to cor-
paid for fuels by ZAR10.6mn as a result of the ruption charges.™

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