PetroSA warns against refinery delay
PETROSA this week warned against the government delaying a decision on the multibillion-rand Coega refinery project for four to five years, saying it might push the country into a crisis of petroleum-product shortages similar to chronic electricity blackouts in 2008.
SA could not afford to postpone "a firm, positive" decision on project Mthombo, PetroSA’s mooted crude-oil refinery project in Coega, near Port Elizabeth, PetroSA CEO Nosizwe Nokwe-Macamo said.
PetroSA’s push contrasts with the National Planning Commission’s approach — it recommended that a decision on the project should be postponed to 2016 or 2017.
If a positive decision on project Mthombo were delayed for too long "we’ll find ourselves, as a country, in the terrible situation, with regards to liquid fuels", Ms Nokwe-Macamo said yesterday. "Given the strategic importance of energy to the economy, we submit that our country cannot afford such a scenario."
According to PetroSA, the refinery will ensure the availability of refined petroleum products.
PetroSA said that without significant investment in local refinery capacity, SA would be importing 180,000 barrels a day of petrol and diesel by 2020, compared with the current 111,000 barrels a day.
PetroSA said project Mthombo would be the biggest crude-oil refinery in Africa when completed, although its capacity has not yet been finalised.
The company earlier this year sealed a joint study agreement with Sinopec, China’s state-owned integrated energy and chemical conglomerate. The agreement defined how PetroSA and Sinopec would develop project Mthombo’s business case. "We are currently conducting concept studies that will lead to a selection of a refinery configuration and the development of a business case by the end of this year," Ms Nokwe-Macamo said.
The companies would then conduct feasibility studies, which could be completed by the end of next year, to prepare the project for front-end engineering design, an analysis of the technical requirements and investment costs, and approval by the PetroSA board as well as the government. "This allows us an opportunity to continue with robust engagements with our key stakeholders, the government and decision makers in Parliament," she said.
"We also have ongoing engagements with other state-owned entities on infrastructure requirements such as electricity, water, ports and social infrastructure. … This is important for the development of infrastructure in the area to align with progress in the refinery," Ms Nokwe-Macamo said.
The front-end engineering design stage of a project entails an analysis of the technical requirements and estimated investment costs.
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