A final decision on financing and design is expected by March 31 for a planned $11-billion South Africa oil refinery, which would be Africa’s largest.
Construction of the envisioned 400,000-barrels-per-day refinery initially was to begin in 2010 and wrap up in 2014. However, there has been a delay in completing the financing, and construction has yet to start. The current target completion date is 2016.
In November, state-owned Petroleum, Oil & Gas Corp. of South Africa (PetroSA), which is developing the project, said, “Numerous engagements between the company and various stakeholders have resulted in the company strengthening the original business case, and we expect a final decision on the project in the [2012 fiscal] year.” That period ends March 31, 2012.
But the South African government, PetroSA’s leading shareholder, has yet to take a position on the financing structure proposed by the energy company’s advisers. The government also has not yet ratified recommendations of a 2009 feasibility study by KBR Inc. The Houston-based engineering and construction firm was awarded the front-end engineering and design (FEED) study contract for the refinery.
PetroSA is considering several financing options, including secured and collateralized loans, for the planned refinery, known as Project Mthombo. The refinery would be located in the Coega industrial development area in Eastern Cape province.
South Africa imports 20% of its oil. The planned refinery is projected to cut the country’s oil-import costs by as much as $1.7 billion.
The refinery would be linked to an 800-MW powerplant to be fueled by petroleum coke, a by-product from the refining process. The refinery is projected to consume 200 MW, leaving 600 MW to be directed to the national grid.