Growth of the Saldanha IDZ and the West Coast Economy

Africa is experiencing accelerated oil and gas growth and contributes 11% of crude oil and 6% of gas globally. Much of this growth is from Nigeria and Angola but recent gas discoveries in Mozambique suggest that it ‘could be one of the most important natural gas fields discovered in the last 10 years’. China is already the largest crude oil importer from Sub-Saharan Africa, and the proximity of Mozambique to Asia makes it a suitable exporter of liquefied natural gas (LNG).

This increase in oil and gas activity, the location of Saldanha Bay to West and East Africa, and the size of the habour ensures that Saldanha Bay is ideally placed for rig repair and servicing. With 120 oil rigs passing Cape Town annually, Saldanha Industrial Development Zone (IDZ) has been designated as an Oil & Gas and Marine Repair engineering and logistics services complex. This together with the West Coast economy, was discussed at our recent Thought Leaders breakfast, sponsored by Deloitte, on 26 June.

Our first speaker was Nils Flaatten, CEO of Wesgro, who wholly own The Saldanha Bay Industrial Development Zone Licencing Company (LiCo). He updated us on the progress at the IDZ and mentioned that 47%of subsea expenditure happens around Africa. One of our strengths in this sector is our marine engineering experience and other USPs include that the IDZ is a free port i.e. Customs Control Area and companies find it easy to do business. To date, 18 non-binding expressions of interest have been signed – 50% international and 50% local companies. Projections also suggest that the proposed Saldanha IDZ is expected to make a cumulative contribution to Western Cape GGP of R28.7bn and potentially create 14,922 jobs by the end of Year 5.

Herman Jonker, Cape Catalyst Projects at the WCG Department of Economic Development and Tourism, spoke about the West Coast economy and the national and provincial planning frameworks that impact on projects in the Western Cape. Focusing on the Western Cape Infrastructure Framework, he raised the issue of energy and water security on future developments in the West Coast. However Ankerlig Power Station in Atlantis has the potential of contributing to power requirements if converted to a new gas-fired facility. Other areas that would need to be addressed include transport due to the limited capacity of the N7, growing informal settlements and infrastructure needs. He warned that job expectations from Saldanha Steel which actually created 2 500 jobs, resulted in more unemployment in the area. It was encouraging to see an industrial planning process with collaboration across governmental departments to ensure a shared vision of what is required to grow the West Coast economy.

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