Bio Fuels

Engen is a member of the SAPIA (South African Petroleum Industry Association) and as such is supportive of the generic position published by SAPIA that in turn supports the South African government's strategy for renewable fuels and specifically road fuels. Further to this general position are specific areas of activity where Engen considers that we have skills and resources that can contribute to the process of introducing bio fuels to the South African market.

Engen will adopt a similar approach to all countries in which it operates making appropriate adaptations to suit conditions in each country.

Bio Fuel Value Chain and Engen Expertise

The value chain for bio fuels in road fuels can be divided into a few broad areas, namely:

  1. Production of Raw Feedstock
    • Land
    • Labour
    • Agriculture
    • Waste reclamation
  2. Conversion of Raw Feedstock
    • Land
    • Process Know How
    • Process Plant
    • Plant Operation
    • Quality and Standards
  3. Blending for the Market
    • Supplies of Fossil Fuels
    • Supplies of Bio Fuels
    • Blending Know How
    • Primary Distribution
  4. Marketing
    • Secondary Distribution
    • Access to Market / Customers

It is in areas 3 and especially 4 above that Engen has expertise that could be used in collaboration with others to bring bio fuels to South African consumers. As a result, it is in these areas that Engen would consider partnering with other parties.

Areas 1 and 2 above are far removed from the core business expertise of Engen so it is unlikely that Engen will participate to any degree in developing business interests in these.

Bio diesel

Bio diesel produced to meet SANS 1935 (the South African product specification for bio diesel) is fully compatible for blending into SANS 342 (the SA product specification for hydrocarbon- based diesel) at concentrations of less than 5%.

Regulations permit blends containing greater than 5% bio diesel provided this is specifically labelled. No specific blend properties of bio diesel are expected to enhance the quality of the diesel produced from the Engen Refinery.

Bio ethanol

Bio ethanol produced to SANS 465 (the SA product specification for bio ethanol) is suitable for blending into petrol provided the parameters of SANS 1598 (the SA product specification for petrol) are met.

By way of example, specific parameters that require attention when blending ethanol into petrol are:

  • total oxygen content,
  • vapour pressure,
  • distillation curve,
  • RON and MON (i.e.octane numbers) *

* NOTE: the issues are not necessarily limited to the above.

The regulations currently permit approximately 7.5% ethanol by volume in coastal grade petrol.

Bio Fuels and Engen – The Bottom Line

Engen will receive and blend South African bio fuels in line with indications of the South African strategy on Bio Fuels, and especially in accordance with any bio fuel blending mandate that may be introduced. In this context, in order to comply with the regulations it is necessary that any bio fuels that Engen receives must meet the required specifications.

Engen can independently of other oil companies choose to purchase bio diesel from producers and blend this at any point in our supply chain i.e. at a primary depot, a secondary depot or at major consumer site. The marketing positioning of these activities can be changed over time to suit customer aspirations, trends in the market place and continuity of supply.

Bio ethanol is more complex in that when the bio ethanol needs to be added at a place that is remote from the Engen Refinery to ensure product quality, then an area specific industry agreed/ government designated solution may be required. If, however, the uptake is directly through the Engen Refinery (or for distribution ex-Wentworth depot) then it is possible that Engen can utilise bio ethanol independently of industry. The marketing positioning of these activities will primarily be subject to government regulations but some tolerance allows this to be changed over time to suit customer aspirations, trends in the market place and continuity of supply.

(September 2009 )

Contact

External parties who wish to communicate their proposals to Engen are encouraged to contact Neil McHardy on 021 403 4411.

Alternatively, in the general context of the above, if you have a business proposal that you think Engen could successfully pursue please submit a hard copy of your initial (non confidential) business proposal to Engen at the following address:

Neil McHardy
Strategy Development Manager
Corporate Planning
Engen Petroleum Limited
P O Box 35
Cape Town
8000