South Africa has approved long term lease access for oil majors and traders, including BP and Vitol, at Durban’s Island View Precinct, the country’s largest fuel import and storage hub.
The decision ends years of uncertainty over short term leases that had threatened investment, supply security and future development at the facility.
Transport minister Barbara Creecy granted the lease extensions under Section 79 of the National Ports Authority Act.
The clause allows the minister to bypass regular approval processes if it is in the national interest.
Fani Tshifularo, chief executive of the Fuels Industry Association of South Africa, confirmed the development in a statement on Tuesday.
“The Section 79 letter was issued to our members. It is in our favour. Remember we wanted a long term tenure, so we got that,” he said.
Durban’s key role in South Africa’s energy security
Island View Precinct, which sits within Durban port on the east coast, handles about 70% of the country’s fuel imports.
It is a critical part of the energy system, providing storage, distribution and marine terminal operations for domestic supply.
The approval means Sapref Pty Ltd, an entity jointly owned by BP and Shell, can continue its import operations at the hub.
Sapref had shifted focus to fuel imports in 2022 after shutting down its refinery business, later selling the plant to state owned Central Energy Fund (CEF).
Engen, which its majority is owned by Vitol, said it also received ministerial approval, though conditions were attached.
The company did not give further details on the terms.
Tshifularo added that 25 year lease negotiations with Transnet National Ports Authority (TNPA) would begin soon.
“For my members, I know that there are 25 year lease negotiations that are going to commence with TNPA,” he noted.
Government and industry response
A spokesperson for the transport ministry said details of the Section 79 approval could not be disclosed yet.
The ministry added that an official statement would be released in due course.
Meanwhile, the Central Energy Fund did not comment on how the decision might affect its own pending Section 79 application.
The fund has been considering plans to revive the flood damaged Sapref refinery under the South African National Petroleum Company (SANPC), a subsidiary of the CEF.
It is also working to expand its oil trading division to strengthen the state’s role in the fuels market.
Industry operators said the new lease arrangements give clarity and security of tenure at Island View Precinct.
They noted that this step is important for maintaining steady imports, investment and infrastructure upgrades at the hub.
