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Oil and gas giant sells fuel terminal in historic deal

Home Infrastructure Energy – Power Generation Oil and gas giant sells fuel terminal in historic deal

BP Southern Africa (BPSA) has completed the handover on 26 May of its East London liquid fuel import terminal to local black women-owned and managed petrochemicals company the Wasaa Group. In terms of the arrangement, Wasaa Terminals took over full operational responsibility for the terminal on 6 December 2021, and has acquired all of the terminal’s movable assets and a 20 percent stake in the berth to terminal pipeline.

Speaking at the ceremony, Wassa group founder and Managing Director, Nokwanele Qonde, said Wassa intended to immediately upgrade the capacity of the terminal and LPG facility, as well as streamline operations at the port. “There already is a sphere which is a vessel for LPG storage that we are planning to upgrade. We will bring it into operation and increase its capacity so that this terminal can be key importing infrastructure for liquefied petroleum gas,” she said.

Qonde said the time was right to bring rail infrastructure back to the port. “Our operations do not extend to the port, but we are working with the Department of Transport towards this because rail is one of the key transportation modes in the oil and gas industry,” she said.

Wassa Gasses said the landmark deal would firmly entrench its position as an emerging commodity trader in the Eastern Cape region, and that it forms part of BPSA’s commitment to support transformation in the energy sector. The long-term commercial contract provides synergies for both BPSA and Wassa. BPSA retained operations of its transport business operating out of East London, while Wasaa Terminals will provide storage and handling services to BPSA as well as aggregation services to other BBB-EE companies.

Nokwanele Qonde said, “This transaction is a result of the hard work the management team has put in place since we started our operations in 2009. The conclusion of this deal fits in snugly with our strategic objectives of being the leading provider in logistics, gasses, trading, chemicals, and commodities in Sub-Saharan Africa and beyond. We firmly believe that this transaction will serve to deepen transformation in the petrochemicals industry and serve as a catalyst for the meaningful participation of women in the industry.”

The acquisition of the fuel terminal by the Wassa Group is set against the backdrop of a Memorandum of Understanding it signed recently to upgrade and operate LPG storage facilities for Petromoc, a state-owned entity in Mozambique, and the second largest oil and gas firm in Southern Africa.

“Wasaa Terminals takes over the terminal with excitement and anticipation. It has been a long, arduous but worthwhile journey that demonstrated BPSA’ s faithfulness to due process, ethics and transformation led by black women,” said Qonde.

BPSA CEO Taelo Mojapelo said the country’s terminal landscape was evolving and there was growing participation from new market entrants keen to make their mark in the industry, including integrated traders and independent logistics operators. “This transaction is an important contribution by BPSA towards the country’s efforts to empower black and women-owned entrepreneurs in the energy sector. As we handover the reins, we continue to support WASAA to help them get up to speed and ensure a seamless transition which is necessary for future success,” said Mojapelo.

Mojapelo said BPSA had demonstrated its commitment to meaningful and sustainable transformation over the years by:

  • Concluding one of the first BEE equity transactions with the Mineworkers Investment Company (MIC) and the Women’s Development Bank (WDB) in 2001.
  • Following MIC and WDB’s exit from BPSA in 2014, BP sold a 25%+1 share in equity to Broad-Based Black Economic Empowerment (B-BBEE) partners, namely Kapela Holdings, which holds a 20 percent +1 share in equity, and the Energy Mobility Education Trust which hold a five percent share in equity in the oil and gas company.
  • Setting up the first BEE company in the oil and gas sector in 2005.
  • Making it possible for BEE companies to participant in core areas of the oil and gas industry such as infrastructure ownership and management. BPSA has closed a number of empowerment deals over the years, with Makwande Supply and Distribution, a 100 percent black woman-owned qualifying small enterprises, graduating from the SMME category to a generic company.
  • Facilitating supplier development and increasing the pool of B-BBEE participants in the industry by creating opportunities for new small-to-medium -black-owned enterprises in the secondary transport sector.

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