China Petroleum & Chemical Corp. (600028) and PetroSA, South Africa’s state-owned oil company, signed a framework agreement to build a crude refinery that’s set to be the country’s biggest.
The companies agreed to include the Industrial Development Corp., a Johannesburg-based state lender, into the next phase of the $10 billion Mthombo refinery project in Port Elizabeth on South Africa’s south coast, they said in a joint statement.The framework agreement with Sinopec, as Asia’s biggest refiner is known, is valid for two years.
The 400,000-barrel-a-day plant would almost double the country’s current combined capacity of 497,000 barrels from four refineries, according to data from the South African Petroleum Association. PetroSA started studying Mthombo as diesel and gasoline imports rose on the back of economic expansion, with demand exceeding local refinery output for the first time in 2007.
“Sinopec and PetroSA will jointly explore other cooperation opportunities in the hydrocarbon industry,” Sinopec Group Chairman Fu Chengyu said in the statement.
The companies in May last year agreed on how they will make the business case for the refinery. The framework signed today creates opportunities for cooperation in oil and gas exploration in South Africa and its surrounding countries, the companies said in the statement.
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