Vivo Energy, a subsidiary of global trader Vitol, is investing around $130 million to bulk up its fuel storage capacity in South Africa's major port city Durban along the east coast, a senior company executive said on Tuesday.
The investment, planned before the US-Israeli war with Iran upended global energy markets and choked off the Strait of Hormuz transit route, could help South Africa better weather future supply crises, said George Roberts, chief executive officer of Vivo Energy's local unit Engen.
Southern and East African countries including South Africa, which is a net importer of crude and refined petroleum products, are vulnerable to Middle East supply disruptions, analysts said, a problem exacerbated by inadequate infrastructure and storage capacity.
Roberts told Reuters the company was adding approximately 125,000 cubic metres storage capacity in Durban to increase its overall storage capacity in the area to 500,000 cubic metres, expecting it to come on stream from the third quarter of 2026 through to Q3 2027 and help act as a future buffer to unexpected supply shocks such as those emanating from the Middle East.
"This will allow you to increase the stock levels in-country and therefore if something like this happens again, it gives us more time to go and find product elsewhere to bring to South Africa given it takes on average 20, 25 days to ship product to South Africa depending on where it comes from," he said.
The additional capacity derives from converting old refinery tanks in Durban, and upgrading another receiving facility at Island View, part of ongoing efforts by Vivo Energy to convert the fire-damaged Engen refinery into a storage terminal for a range of products, including diesel, petrol and jet fuel.
Vivo Energy, which markets Shell - except in South Africa - and Engen brands, is a leading African fuel retailer with more than 4,000 service stations across the continent. The company is currently investing in LPG and refined petroleum storage facilities in Ivory Coast, Senegal and Morocco, said Roberts.
"Besides Uganda we have invested in our depot assets in Tanzania and Mozambique in recent years and if the right opportunity comes up in those countries, we could invest more," Roberts said.
(Reporting by Wendell Roelf, editing by Alexandra Hudson)