Siseko Njobeni
3 October 2008
Johannesburg — THE minerals and energy department has granted state-owned oil and gas group PetroSA a manufacturing licence for the 400000- barrels-per-day crude oil refinery at Coega, near Port Elizabeth.
The licence allows PetroSA to manufacture refined petroleum products at Coega. In August, PetroSA appointed global financial services group HSBC as a financial adviser for the project, also known as Project Mthombo.
The $11bn refinery is central to government's plans to ensure security of supply in the liquid fuels.
"It provides a strategic new energy hub in addition to the present Durban crude supply chain, while presenting a major economic growth opportunity for an under- developed region of SA," PetroSA CEO Sipho Mkhize said yesterday.
The refinery -- said to be one of the biggest post-2010 investments -- is in line with the recommendations of the d epartment's energy security master plan which proposed that PetroSA procure at least 30% of all crude oil consumed in SA.
Mkhize has said the growth rate of demand for fuel justified the construction of a new crude oil refinery within the next five to seven years. The demand for automotive fuels in southern Africa exceeded local production capacity, and SA was increasingly dependent on the importation of refined products.
The refinery was part of a strategy to ensure that the unsustainable and urgent national fuels supply situation was reversed, according to PetroSA.
PetroSA was looking for an engineering partner for the project and was expected to announce the winning bidder by the end of this month, PetroSA spokesman Thabo Mabaso said yesterday.
PetroSA invited bidders for the engineering contract earlier this year. The winning bidder would manage the various project phases of the refinery. The engineering partner would execute the feasibility, front-end engineering design and project management and the commissioning of the refinery. Mabaso said the tender had attracted bids from local and international companies.
The refinery, expected to be the biggest in Africa, will come on stream in 2014 and will create more than 25000 direct and indirect jobs.
PetroSA plans to provide new oil terminal facilities and upgrades in Cape Town, Mossel Bay, Port Elizabeth, Durban and Gauteng.
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good news for PE and the eastern cape ? or is it another project thats going to go down like the alcan smelter due to africa red tape ? just a comment use it , dont use it !!