Bloomberg News

PetroSA to Make Final Decision on $10 Billion Refinery by March

October 25, 2011

Oct. 25 (Bloomberg) -- PetroSA, South Africa’s state-owned oil company, will make a final decision on its planned $10 billion Mthombo refinery by March.

The siting of the proposed refinery at the Coega industrial development zone outside Port Elizabeth has already been approved, Thabo Mabaso, a company spokesman, said today by phone. The size will be determined by the end of the first quarter, he said.

PetroSA still plans to commission the refinery “in the latter part of this decade,” Benny Mokaba, the company’s chairman, said in an annual report presented to parliament today. Mthombo, with a planned capacity of 400,000 barrels a day, could cost $10 billion and be the country’s largest, the company said last year.

PetroSA, based in Cape Town, started studying Mthombo about four years ago as diesel and gasoline imports rose on the back of economic expansion. Demand exceeded local refinery output for the first time in 2007. The country has six refineries with a combined capacity of about 692,000 barrels a day, according to data from the South African Petroleum Industry Association.

A feasibility study was completed last year and submitted to the government. A final decision will be subject to cabinet approval.

“Various concerns were raised by stakeholders, such as issues pertaining to size,” Mabaso said. The board could come back and say the business case is sound and continue with the proposed size of 400,000 barrels a day, he said.

--Editors: Stephen Cunningham, Amanda Jordan.

To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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