Singapore firm to build the first dedicated LPG rail line in South Africa

Singapore-based British liquefied petroleum gas (LPG) firm Petredec has partnered with South African state-owned logistics firm Transnet to develop the country’s first bulk rail distribution system for LPG. The project, slated to become operational in 2028, will include a dedicated train operation and a logistics hub with storage facilities in Gauteng Province, South Africa’s economic heartland.

The LPG will be transported from a terminal in Richards Bay on the east coast to the new storage and logistics facility in Gauteng via South Africa’s first scheduled LPG train service. Each of the 75-wagon trains will have the capacity to carry over 2,500 tonnes of LPG, with an initial schedule of up to three trips per week. From the Gauteng hub, the gas will be distributed within South Africa and to other countries in the Southern African Development Community (SADC) region.

The new system aims to bolster South Africa’s ability to distribute LPG and address anticipated rising demand. Currently, South Africa’s per capita LPG consumption stands at approximately 7kg annually, significantly lower than international norms. The country has historically struggled to secure adequate supplies of the gas, which is primarily used for household cooking. Forecasts indicate a rapid increase in demand over the coming years, with consumption potentially reaching 10-15kg per capita. Given the country’s limited domestic production, much of this future demand will need to be met through imports.

LPG is considered a cleaner alternative to wood, charcoal and kerosene, still used by over 900 million people in Africa. These traditional energy sources are inefficient, unsafe, and produce harmful fumes. While the upfront cost of LPG equipment, such as cylinders and stoves, can be prohibitive for low-income households, the ongoing expense of using LPG is typically comparable to or lower than that of the solid biomass fuels or kerosene.

Petredec is an integrated LPG company, with its operations encompassing shipping, trading, and wholesale distribution, as well as terminal operations. Its downstream division has focused on expanding LPG infrastructure in the Indian Ocean region, with several terminals in operation and under construction. The initial terminal was established in Mauritius in 2014, with the Richards Bay facility in South Africa coming online in 2020, developed in partnership with Bidvest Tank Terminals. In South Africa, its operations include two subsidiaries - Petrefuel, which is manages liquid fuels, and Petregaz, specialising in LPG distribution.

Petredec, which was established in 1980 in the United Kingdom I led by Giles Fearn who was appointed as Group CEO in 2010.  The following year company expanded its presence in South Africa by acquiring Quest Petroleum, which supplies a network of Quest-branded service stations across the country.

 

References

‘Petredec acquires Quest Petroleum in South Africa’, Petredec, 01 March 2021

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‘LPG is a fossil fuel. Experts explain why it’s still Africa’s best option for cleaner, greener cooking (for now)’, The Conversation Africa, 13 June 2023

‘The role of LPG in energy security’, Liquefied Petroleum Association of South Africa, 16 November 2023

‘LPGSA clarifies distinction between LPG and natural gas amidst supply concerns’, Liquefied Petroleum Association of South Africa, 12 April 2024

‘Petredec, Transnet enter deal to enhance South Africa's LPG distribution’, Reuters, 04 September 2024

‘Petredec and Transnet Freight Rail enter agreement to enhance LPG distribution in South Africa’, Petredec, 04 September 2024

‘Spotlight on the South African LPG market’, My Gas, Accessed 25 September 2024