South African operator Transnet to raise oil, gas pipeline tariffs

By ANDRE JANSE VAN VUUREN
Bloomberg

South Africa’s energy regulator approved increases for oil and gas pipelines operated by Transnet SOC that enable the ports and rail utility to increase tariffs by 6.9% in the year starting April.

Allowable revenue will climb to 3.4 billion rand ($278 million) in the 12 months through March 2016 from 2.9 billion rand in the current fiscal year, the Pretoria-based regulator said in an e-mailed statement.

Transnet, which applied for an 8.2% increase in tariffs, expects volumes to expand by 2.8% to 17.1 billion liters in the 2016 fiscal year, the regulator said.

“The National Energy Regulator is keen to see pipeline volumes increase as this lowers tariffs and reduces the need for road and rail transport,” it said. “There still appears to be scope to move more volumes away from road and rail transport to pipeline transport.”

Transnet charges producers including Royal Dutch Shell and BP to use its oil and gas pipelines, including the route between the east coast city of Durban, where many refineries are located, and Johannesburg, the country’s economic hub.

Transnet is spending 300 billion rand over seven years to add new rail lines, ports, pipelines and improve infrastructure in Africa’s most industrialized economy.

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