Oil refinery ‘will save SA billions’

18 October 2010

The proposed Mthombo crude oil refinery will help South Africa escape from the “dependency trap” of having to import refined automotive products, ultimately saving the country billions of rands, says President Jacob Zuma.

At the same time, the refinery, to be built at the Coega Industrial Development Zone near Port Elizabeth in the Eastern Cape, would showcase South Africa’s competitive ability to its counterparts globally.

Construction on the refinery, which will be the biggest in Africa, is expected to start in 2012, which would bring the refinery on stream by 2015.

The US$11-billion refinery, which would have a 400 000 barrel a day capacity, is meant to ensure security of fuel supply in South Africa. The country is currently dependent on international oil companies to provide for its liquid fuel energy needs.

“With Project Mthombo, this country stands to save an estimated R12.6-billion a year in energy costs once the refinery is running, and could export oil across Africa,” Zuma said last week.

Zuma was speaking during a visit to PetroSA’s gas-to-liquid refinery in Mossel Bay in the Western Cape. The visit by Zuma and Energy Minister Dipuo Peters was to obtain a first-hand account of PetroSA’s operations, his office said.

“We welcome the fact that PetroSA is making its impact, not only in job creation but in empowering the people as well. It employs close to 2 000 people, while 27 500 more will be absorbed within the crude oil refinery that is planned,” Zuma said.

Zuma welcomed the impressive growth of PetroSA following its successful merger of Mossgas, Soekor and parts of the Strategic Fuel Fund in 2002.

PetroSA is reaching markets in Europe, the United States, Caribbean, Middle East and Far East, which Zuma said was an important achievement.

He also commended the National Oil Company for the role it was playing in reducing the country’s dependence on imported refined fuel.

Source: BuaNews