(Ecofin Agency) - African Oxygen (Afrox) has announced that it has entered into a 10-year agreement worth R1 billion to supply liquefied petroleum gas (LPG) to a key distributor, the Gordons Enterprise, in Lesotho.

According to the South African gases and welding products Company, the contract with Gordons Enterprise will secure a new LPG filling site in the Maseru industrial development zone, providing a significant boost in storage, to meet the increased demand in the area.Afrox at the same time, signed a five-year agreement worth R100 million to supply LPG to a distributor partner in Mthatha, in the Eastern Cape.

The company said this contract will allow the volume of LPG to increase by about 100% in the area.“These two contracts demonstrate our ability to grow existing business with strategic partners. Enabling this is our supply-on-demand contract with global LPG supplier Petredec. Since May 2016, we have imported 30 percent of our LPG needs via Petredec and BTT in Richards Bay and this security of supply will be an engine for growth in the LPG market for Afrox,” Schalk Venter (photo, right), Afrox managing director, said.

The company on Thursday revealed that it has signed a 10-year, R45 million LPG deal with one of South Africa’s largest poultry producers which supplies stores such as Woolworths and Nandos.

Afrox also secured a R59 million contract to supply pressure storage vessels for nitrogen and LPG to a solar power project in the Northern Cape, Reuters reports.

Anita Fatunji