Publication: Business Day Issued: Date: 2007-02-01 Reporter: Chris van Gass

MAN Ferrostaal Launches Offset Plant

 

Publication 

Business Day
Date 2007-02-01

Reporter

 Chris van Gass

Web Link

www.businessday.co.za

 

CAPE TOWN ­ The first phase of a R200m offshore fabrication yard at Saldanha Bay was launched by German-based industrial giant MAN Ferrostaal yesterday as part of its offset commitments related to SA’s purchase of three submarines.

The fabrication yard, along with the establishment of a service and refurbishing hub at the port of Cape Town, forms part of the German company’s total investment of R1,7bn.

It is a major injection that should transform Western Cape into a big player in the offshore oil and gas industry.

The projects are expected to create at least 720 new jobs in Saldanha and another 700 in Cape Town, with indirect job opportunities for 12000-14000 people.

Klaus Lesker, a MAN Ferrostaal director, said the establishment of the two world-class facilities would provide SA with excellent industrial infrastructure and technological capacity to service the burgeoning oil and gas industry along Africa’s west coast.

Industry estimates are that about $100bn will be invested in oil and gas production and exploration in west Africa in the next five years.

Lesker said rising demand for oil and gas had focused on Africa as a future major source for the commodities. As a leading industrial country in Africa, SA should be capable of contributing to the expansion of the offshore oil fields.

The project investment, managed by the trade and industry department, is the largest offset project delivered to date.

The Saldanha project includes quayside refurbishment and the erection of specialist workshops.

MAN Ferrostaal has entered into a long-term agreement with Grinaker LTA, which will take over the running of the facility once it is completed in August. Grinaker LTA’s initial investment in the facility is estimated at R50m-R80m but could rise to more than R200m, depending on how much capital equipment is deployed on- site.

Grinaker LTA has gained experience running a similar facility in Nigeria for the past five years *1, having completed projects with oil majors ExxonMobil, Chevron, Total and Shell. Lesker said implementation of the Cape Town service hub project depended on new National Ports Authority requirements, which were still under review.

Western Cape MEC Tasneem Essop said the project would be a catalyst in a critical growth sector and would see Western Cape positioned as the gateway to west Africa’s oil and gas fields.

With acknowledgements to Chris van Gass and Business Day.


*1       While all investments and projects of this nature are clearly to be welcomed, can this truly be considered an SDP NIP projects with direct causality?

The west of Africa is in any case a gas/oil area and South Africa/Cape Town/Saldanha Bay are in any case and have always formed part of the regional industrial support infrastructure.

Also is R200 million too big an investment for companies like Grinaker LTA to do own their own, especially as they already have directly relevant and similar experience?

I think the country was expecting mega-projects from the big-talking industrial members of the GSC and GFC. To my mind mega-projects are R1 billion to R10 billion high tech projects that just cannot be undertaken without foreign financial and technology partners. Even then, for NIP credits, there has to be directly causality.