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Coega crude refinery plans in progress

by Luyanda Makapela
on 19 Mar 2008
BuaNews Online
BuaNews Online

The Petroleum, Oil and Gas Corporation of South Africa (PetroSA) has completed the pre-feasibility study into the planned multi-billion Rand crude oil refinery in Coega.

The refinery is expected to enable South Africa to generate high quality fuels.

"Planning for the new refinery is now well under way," PetroSA Chief Executive Officer Sipho Mkhize said on Tuesday.

The study, which was completed by a leading United States-based refinery specialist, in conjunction with local project engineering company Ilitha, was presented to PetroSA at its head office in Cape Town on Monday.

"Configuration design is advanced and we have now begun discussions with several international and local parties regarding potential financial and operating partnerships,"

He said the refinery was part of a holistic strategy to ensure that the current urgent national fuels supply scenario was reversed, because the country could not afford a liquid fuels crisis.

The economics for the project looked encouraging following the World Bank's indication that it supports the concept.

Mr Mkhize said production has been planned for a product mix of up to 70 percent distillates, diesel and aviation fuel, and 30 percent high octane gasoline.

These fuels will meet the highest Clean Fuels (Euro V) Specifications, in line with anticipated legislation with bio-fuels and petrochemicals opportunities also included in the design parameters.

"With the high quality of fuels produced, a world class configuration ready to process challenging cheaper crudes, export opportunities will also be economically attractive," said Mr Mkhize.

Early this year, Coega Development Corporation has selected PetroSA as a preferred investor for a refinery in the Coega Industrial Development Zone (IDZ).

The decision to locate the refinery at Coega was based on commercial drivers, but national interest factors such as unlocking growth potential in a region were also considered, said the Chief Executive Officer.

Department of Minerals and Energy, on the other hand, has recently gazetted the Energy Master Plan which will support an additional crude refinery to address the rapidly increasing shortfall of locally refined products for the country's economy.

Such a crude oil refinery, according to Mr Mkhize, would also assist in reducing the balance of payment pressures that resulted from South Africa's growing dependence on refined products and imports.

"This crude refinery will be the lowest cost, high quality fuels producer in the African continent.

"In support of the planned refinery and national supply network as laid out in the DME's Energy Master Plan, PetroSA's planning includes the provision of new oil terminal facilities and upgrades at Cape Town, Mossel Bay, Port Elizabeth, Durban and Gauteng," Mr Mkhize said. - BuaNews.

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