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DNG Energy was recently granted authorisation to begin LNG bunkering operations in the Port of Coega, South Africa, and is aiming to supply up to 3 million tonnes of LNG per year by 2024, Group Chief Executive Officer, Aldworth Mbalati, tells Bunkerspot.

Highlighting the Port of Coega’s strategic location in the Eastern Cape, Mbalati says the company is well placed to capitalise on the vast amount of traffic that passes through the region.

‘I call it the El Dorado in the shipping industry,’ says Mbalati, who founded DNG Energy in 2013 with the vision of achieving energy security and stability with responsible and sustainable energy solutions for Africa. ‘It’s a very valuable piece of real estate that we have, and we seek to develop very good infrastructure to cater to large volumes of shipping coming through the area. That is why we went for an LNG bunkering licence.’

The process of obtaining the licence, however, was by no means easy, says Mbalati.

‘It has been many years in the making,’ he says. ‘Someone said that South Africa is the second-most regulated country in the world! The process that we had to go through was very long and laborious but thorough. Just doing the environmental studies, the quantitative risk assessments and getting the various government departments concurring with the port regulators was a mission – it is a feat that someone is unlikely to repeat in the near future. However, we appreciate the advantages of working in a country with a sound regulatory framework as this levels the playing field and leaves no doubt about the process leading to the final approval.’

If obtaining the licence was time consuming for DNG Energy, Mbalati says there is no time to waste when it comes to commencing LNG bunkering operations in the Port of Coega. The company is already investing infrastructure which will facilitate the larger volumes it is seeking to supply.

‘We are in execution mode right now,’ says Mbalati. ‘We are going full force to execute the project to make sure it is completed on time. We are acquiring two LNG bunkering vessels, which means we can take the larger LNG-fuelled vessels that are not necessarily calling into the port and we can fuel them in the bay as part of their ongoing journey.’

While the company is aiming to begin bunkering soon, DNG Energy’s business case is not wholly contingent on supplying LNG to vessels.

‘Even if there was no LNG customer coming to patronise us for the next year, we would ride the wave. In other words, we have looked at the LNG market holistically for opportunities and customers. To this end, we have got other customers in other avenues and that allows us to displace LNG and put it into good use,’ says Mbalati.

In addition to shipping, DNG Energy is also investing in LNG infrastructure for the fuelling of taxis, a mode of transport that accounts for more than two thirds of South Africa’s daily commuters.

‘One thing that is important for all of our customers to note is we are in this business to stay – we are patient enough in terms of picking up the volumes,’ Mbalati says regarding vessel bunkering.

He continues: ‘Also, if you look at South Africa now, there are a few LNG-ready vessels that call Coega itself,’ he says, adding, ‘if you look at the Valemaxes that move from Brazil all the way to China, Algoa Bay becomes a very good port for them to fill up.’

Global marine LNG demand is expected to range between nine and 10 million tonnes per year by 2025 – and Mbalati is confident that the strategic location of Coega coupled with the company’s unique status as Africa’s first LNG bunkering supplier will enable it to achieve a significant chunk of this volume.

‘We believe, based on our conservative estimation, that by 2024 we will be doing between 2.4 million and 3 million tonnes of LNG a year, just in LNG bunkering. It is a very good and compelling case in terms of making the operations work – it’s such a big market.’

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