Pipeline transport is the transportation of goods through the mode of pipe networks. Products moved in this manner include liquefied commodities (crude oil, diesel, petrol, jet fuels, gases (methane rich gas). In terms of gases it is mostly for gases deemed stable and safe to be conveyed via pipelines.Transnet Pipelines (formerly known as Petronet) is a subsidiary of Transnet (see Transnet Units chart below), operates, stores, monitors and manages almost all freight pipelines in South Africa; with the exception of a pipeline owned and operated for crude oil by Caltex in the Western Cape Province (Saldanha to Milnerton).

The network covers over 3,000 kilometers and is concentrated between Durban and Gauteng and traverses over five provinces. First established in 1965, due to identified capacity constraints on railways (Durban Mozambique) for Gauteng hinterland consumption; Transnet Pipelines today moves between 16 17 billion liters of refined products and 18 million GigaJoules (GJ) of rich methane gas annually. In terms of future growth, a New Multi-purpose Pipeline (NMPP) is under construction with completion date of 2011 earmarked to secure fuel supply for inland market consumption.

Until after 2005 the Pipelines was regulated by the Department of Minerals and Energy while the Department of Transport regulated policy. These two were later reconfigured and now National Energy Regulator (NERSA) is the current regulator. The governing acts related to construction, operation and maintenance of petroleum and gas pipelines are:

• National Key Points Act (Act 102 of 1980)
• Gas Act, 2001 (Act No. 48 of 2001)
• Petroleum Pipeline Act, 2003 (Act No. 60 of 2003)
• Petroleum Products Amendment Act (Act 58 of 2003)
• National Regulator Act, 2004 (Act No.40 of 2004)

Transnet Pipelines in recent years has encountered challenges resulting from NERSAs tariff methodology which impacts the ability of pipelines to service its debt and earn a return commensurate with the risks associated with the business. This in turn means Pipelines will have to apply in competition with any other interested parties for licenses to construct and operate additional liquid fuel facilities such as pipelines and storage facilities (tank farms).

Transnet pipelines strategy is to do the following:

• Investment in additional capacity through the roll out and implementation of the NMPP which will ensure that pipelines employs the latest technologies and designs to execute its strategic role in the South Africa economy.

• Ensuring its role in the logistical fuel chain is fulfilled to ensure that the inland market (Gauteng) fuel requirements are met, especially during the NMPP construction phase. This will be done by the execution of Pipelines Bridging Plan which consists of four key initiatives:

• Operational improvements
• Use of drag reducing agents

• Transporting diesel or petrol in the crude pipeline and cooperation with Transnet Freight Rail, especially with the transportation of jet fuel to O.R. Tambo International Airport (ORTIA).

• The revised implementation plan for the NMPP necessitates the use of both the NMPP and the Durban to Johannesburg Pipeline (DJP) for the 2012 and 2013 years to meet market demands.

• Staff up to 700 employees by 2013 to ensure that the transition into the new business environment with NMPP is successful.

• Continued interactions with regulatory Authorities in this dynamic environment to facilitate regulatory reform and to ensure alignment and cooperation amongst all stakeholders. It will be imperative to ensure that the tariff methodology is stabilized so that funding of strategic projects can continue with relative certainty and stability.