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South African investment firm Thebe Investment Corporation has acquired a 15% stake in Burgan Cape Terminals, which last year was awarded a 20-year contract by Transnet National Ports Authority (TNPA) to develop and manage fuel storage and distribution facilities at Cape Town Harbour.

Other shareholders include storage terminal operator VTTI (70%) and newly established company Jicaro (15%).

Established in 2008, Burgan Cape Terminals was formed in response to the shortage of storage capacity in South Africa and the government’s drive to improve the security of fuel supply and increase storage capacity in line with future fuel demands and the National Development Plan (NDP).

Last year, TNPA awarded Burgan Cape Terminals a 20-year contract to develop and manage fuel storage and distribution facilities at the Eastern Mole of Cape Town Harbour.

Commenting on the 15% investment deal this week, Zukie Siyotula, chief executive of Thebe Capital said: "This is a great partnership of skills, expertise and experience and I am extremely excited about the potential that the fuel terminal can unlock, both for Thebe Investment Corporation and for South Africa. This investment allows us to increase our focus on the growth that will come from the energy sector and complements our existing portfolio and strategy perfectly."

The facility in Cape Town Harbour will be used for the storage and distribution of both locally produced and imported fuels. Burgan is said to have already signed long-term (10-year) lease agreements with oil companies and total annual throughput is estimated at up to 805 000 cubic metres per year.

Fuel products are expected to be mainly sourced from the Chevron Oil refinery. In case of a product shortfall, clients at the terminal will have the option to import products subject to the regulations governing the fuel industry.

For the Cape Town Harbout project, Burgan entered into a joint venture with Rotterdam-based VTTI, which operates, develops and acquires refined petroleum product and crude oil facilities and energy infrastructure assets on a global scale. Total capital expenditure for the project is estimated at around ZAR 650 million (approximately US$58.8 million).

Wandile Mseleku, chief executive officer (CEO) of Burgan Cape Terminals remarked: "We are very proud to partner with Thebe Investment Corporation and VTTI. Thebe has an exceptional track record as a pioneering black owned investment company that is known for its active investment philosophy. VTTI is one of the world’s top fuel storage infrastructure developers and its experience in and focus on developing storage facilities safely and reliably will be of enormous benefit for this project.

"The development of the fuel storage facility in Cape Town will not only address the country’s need to increase fuel infrastructure and capacity but it will also have a positive effect on the economy, on global skills transfer and on the transformation of the local energy sector."

Govert Rietema, Director of Global Business Development at VTTI BV, said: "The ready uptake of the facility by customers makes it clear that there is growing local demand for refined petroleum products in the region. We are so pleased to be able to share our extensive global experience with our local partners and look forward to working together."

In order to construct the facility, environmental authorisation is required. Leading global sustainability consultancy ERM has been commissioned to independently conduct the Environmental Impact Assessment (EIA). ERM has submitted the Final Environmental Impact Report to the Western Cape Department of Environmental Affairs & Development Planning for approval.

Burgan is also required to obtain a licence from the National Energy Regulator of South Africa (NERSA) to establish the facility, which the company has already applied for.