Offshore bunker industry booming, but concern over environment issues
A new multibillion-rand industry is booming in Algoa Bay, with offshore bunkering already providing dozens of jobs and more than one million tons of fuel transferred to ships since operations started 18 months ago.
But while the bunkering is driving a massive revenue stream and burgeoning new business hub in Nelson Mandela Bay, warnings have also been sounded over the potential environmental threat.
The bunkering company, Aegean, had already delivered about 1.2 million tons of fuel to ships since it began the service in April last year, Aegean regional manager Kosta Argyros said.
The profits from the sales go to the fuel suppliers, which range from Sasol in South Africa to companies in Russia and the Americas.
Bunker fuel goes for an average $330 (R4 488) a ton at present, which means the Algoa Bay enterprise has generated a gross $396-million ( R5.4-billion).
The amount is offset by the various customs tariffs that the suppliers pay to South Africa.
They also pay Aegean to store their fuel on the Umnenga (Xhosa for whale), the mother ship anchored at Ngqura, and to have it delivered to the waiting ships.
However, the government’s Operation Phakisa is being put to the test because the huge financial benefits of offshore bunkering are emerging amid warnings that the enterprise hangs like a sword over the endangered African penguin.
Conservationists say the massive spike in shipping and transfer of fuel at sea hugely increase the danger of a spill, nullifying the sustainability that is supposed to be a cornerstone of the state marine development programme.
Argyros did not give a specific profit figure, but Aegean charges $1.96 (R26.50) a ton globally for its services, meaning it has earned R30-million from a year-and-a-half of business in Algoa Bay.
Using three barges, Aegean services about 100 ships a month.
It was a dramatic increase from close to zero ships before and a further 40 were now arriving for other services around the bunkering, Argyros said.
“There is a need for stores and water, for engineering repairs, for medical and dental care, and for crew changes and shore visits, which, in turn, link to a demand for hospitality and flights.
“So an entire hub of marine services has developed around what we offer,” he said.
Transnet National Port Authority (TNPA) Port Elizabeth port manager Rajesh Dana said chandler services had taken on 37 new employees and 32 had been employed in shipping agencies.
“There are, on average, 10 crew member changes a day, and 25 people are now employed on the vessels providing this service.”
The client ships were mostly foreign ones not headed for South Africa.
“The Algoa Bay bunkers allow the ships to take minimal fuel from the port of loading and then fill up halfway again if they are go- ing east or west,” Dana said.
But Port Elizabeth’s bunkering debate is leavened with irony.
The SA Marine Safety Authority says the bay is the only spot suitable for bunkering because, despite the wind, it is peculiarly well sheltered.
It is also, however, the stronghold of the African penguin, home to more than half the surviving 60 000 birds – 2% of what the numbers were a century ago.
According to Aegean, it had suffered just two spills in 195 000 bunker transfers worldwide up until a year ago, and both were due to mistakes by the receiving ship.
The second one occurred shortly after the company began operations in Algoa Bay.
In August last year, the Energy Challenger failed to close a gasket and 100l was spilled in the bay.
But in July this year, according to Spanish media, the company was also involved in a 5 000l spill off the resort island of Gran Canaria.
The authorities have said stringent controls are in place and they are comfortable that the enterprise will not exacerbate the penguin’s dire position.
But the process leading up to the licence allocation sparked consternation from the marine conservation sector, none of whose members was consulted.
Senior African penguin researcher, Nelson Mandela University’s Dr Lorien Pichegru, said this week the situation was still perilous although she had persuaded the authorities to move the fuel transfer anchor points further away from St Croix Island, where the biggest penguin colony lives.
“It’s still very serious. We should not have offshore bunkering,” Pichegru said.
“It’s an economic compromise at the expense of an endangered animal.”
SANParks, which is planning a major new marine protected area in Algoa Bay, questioned the lack of environmental legislation guiding the alignment of the allocation process under the TNPA and the maritime safety authority.
SANParks said it triggered concerns, demanding a full environmental impact assessment.
However, the process remained the same at present, SANParks co- ordinator Ané Ooosthizen said.
“So all we can do is raise our con- cerns and be ready to respond as fast as possible [if there is] a spill.
“The bunkering is happening almost 24/7, so it’s not if a spill will occur – just when.
“If there’s a spill, the cost will be carried by the whole of PE from tourism to fisheries.
“Jobs will be lost.”
Ocean economy expert Peter Myles said the only way to reduce potential conflicts of interest in the marine environment was to proactively establish a marine spatial plan and then undertake a cost-benefit analysis and risk assessment of the situation.
“This is especially important when the ocean space is a marine biodiversity hot spot as well as a Mission Blue Hope Spot, a special place critical to the health of the ocean, as is the case with Algoa Bay,” he said.