R2.8m LPG filling plant phase progresses

Gas supplier KayaGas is working on the roll-out of the second phase of its liquefied petroleum gas (LPG) filling plant project in the Western Cape.

The R2.8-million Industrial Development Corporation-funded second stage is expected to be completed by July this year. The project includes expanding the storage space and offices, as well as increasing the capacity of loading trucks. The storage capacity will double from 125 t to 250 t and, as a result of this throughput, the loading will increase from 650 t/m to 1 300 t/m.

The LPG filling plant project, which is set to benefit low-income homes in the Western Cape, will be commissioned over four stages. The first stage, which cost R15-million, was completed in early 2011.

KayaGas MD George Tatham says the company has brought about a major change in the LPG market in the Western Cape, as it is a new player in the gas market and is the only one servicing the poor, with the new plant enabling it to do this more effectively.


Tatham says the company has faced a few challenges in getting the project started, including a delay in obtaining official approvals, as well as having to import most of the components. “There seems to be no competitive local manufacturers,” he states.

“The biggest hurdle was that a number of State departments were involved in the project, often each with its own specific agendas and demands,” he adds.

Further, the absence of town planning regulations regarding LPG stockists in informal settlements brought about additional challenges.

The problem arises from an otherwise commendable attempt by the municipalities to apply suburban standards applicable to settlements where there are property registers, property surveys and a town planning scheme.

These standards are not applicable and are basically nonexistent in informal areas but are, nevertheless, essential for Flammable Substance Certificates to be granted by fire safety officers.

KayaGas has developed safe storage in redesigned and recon- figured ship containers and had them certified as fire safes by experienced engineers. However, the municipality continues to refuse to recognise these containers as rational alternatives.

Meanwhile, fire safety officers can and do issue fines of R1 000 every time KayaGas attempts to deliver more than 38 kg to one of its stockists, as well as each time the stockists are found storing more than 38 kg of gas, which may force the company to take legal action in a bid to resolve the matter.

In addition, bureaucratic delays, anticom- petitive behaviour by competitors and, often, conflicting government department agendas are also a cause for concern, Tatham states.

“In my opinion, this is seriously undermining the creation of jobs and economic growth,” he adds.

Gas Supply

KayaGas states that the current gas supply in South Africa remains tight, as the country relies on six refineries for most of its supply. The refineries are vulnerable to uncoordinated maintenance and other shutdowns.

In November 2011, the Depart- ment of Energy announced that it was working with industry to find solutions to alleviate the LPG shortage, which was having a serious impact on the manu- facturing, automotive and hospitality sectors of the economy.

Tatham says imports are obviously the solution, but there are constraints imposed by the inadequate import facilities. There are projects in the pipeline which have been delayed owing to objections by the port authorities.

Meanwhile, Tatham says the company is planning to expand further, as there are exciting projects in the pipeline for the LPG industry.

He declined to elaborate on these projects, saying the information was confidential.

By: Celest Smith
3rd February 2012

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