Reuters – South Africa, a net importer of refined oil products, is looking to West Africa and the Middle East, including Iran, for potential partners on a new refinery project, energy ministry officials said on Friday. Energy minister Mmamoloko Kubayi told parliament that the cabinet expects to decide by December whether to build the refinery that has been under consideration for almost a decade.
National oil company PetroSA has promoted the idea of building a refinery with a capacity of up to 400,000 barrels per day on the east coast, but the government was put off by the $10 billion price-tag in 2010 and a lack of equity partners.
Kubayi said the refinery was now urgent because South Africa’s oil imports were increasing.
She said that a public-private partnership to develop the refinery, which would be majority owned by the government, was the preferred approach.
“By the time any new refinery is completed, the country will be importing in excess of a third of its fuel requirements,” she said.
The acting director general at the ministry of energy Tseliso Maqubela told Reuters after a separate press conference that South African authorities were in talks with countries and firms from the Middle East and West Africa to build the refinery.
“At this stage no country is excluded,” Maqubela said when asked if Iran was among the countries being considered.
He said there was no decision yet on the new refinery’s production capacity or its construction costs.
Royal Dutch Shell, BP, Total and Sasol are among the main refinery operators in Africa’s most industrialised country.
South Africa bought around 68,000 bpd of crude from Iran in May 2012, a month before it halted crude purchases as Western countries pressured Tehran over its nuclear programme.
Pretoria, which also gets oil from Saudi Arabia, Nigeria and Angola, has said it wants to resume imports from Iran since Western sanctions were lifted in 2016.
According to Thembisile Majola, the deputy minister of energy, building the refinery would help South Africa maintain some control over a vital resource such as petrol, diesel and jet fuel.
“There are some issues around sovereignty that are linked to refining capacity,” said Majola.
Kubayi also said the government wants to increase the participation of black fuel wholesalers in importing crude oil, with an immediate focus on West African crude oil, which presently accounts for around half of South Africa’s crude imports.
“The modalities of this strategic approach will be finalised after consultation with the major oil companies in this financial year,” she said. (Editing by James Macharia and Susan Fenton)