South Africa has approved PetroSA’s recommendation to choose Gazprombank to work on the Mossel Bay refinery.
“Cabinet was updated about the process followed by CEF to source partners with requisite technical and financial resources to support PetroSA in bringing the refinery back to full operation. The preferred partner would share in the risk and rewards of reinstatement of the refinery,” said Minister in the Presidency Khumbudzo Ntshavheni.
The official said overhauling the gas-to-liquids (GTL) plant was one of the “critical components of PetroSA’s turnaround strategy”.
The cabinet’s approval is contingent on reaching a final investment decision (FID), which is due in April 2024.
Mossel Bay stopped processing in 2020, after running out of feedstock. PetroSA is seeking a partner to carry out maintenance of the facility and to provide supplies to resume production.
In the longer term, TotalEnergies’ offshore discoveries at Luiperd and Brulpadda could provide supplies – but only from around 2027-28. This could use PetroSA’s existing offshore infrastructure.
amaBhungane reported that Gazprombank was under consideration in November. The investigative report suggested that PetroSA’s criteria gave the Russian company an advantage.
The US announced sanctions against Gazprombank in early 2022, following Russia’s invasion of Ukraine. Other countries have been slower to impose sanctions, though. South Africa has been more conciliatory to Russia than a number of other states.
Mossel Bay was a major employer, the largest in the Southern Cape, with around 1,800 people.
In November, a number of local reports said Eskom was on course to run out of cash to buy diesel for emergency power generation by the end of 2024. Power demand is high at present, owing to high summer temperatures. If Mossel Bay begins producing more diesel, Eskom would likely be a willing buyer.
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