Market News

CAPE TOWN, Sept 23 (Reuters) – South Africa will need more than $8 billion to revive two mothballed state-owned refineries, officials told lawmakers, as the country seeks to strengthen energy security and reduce dependence on imported fuels.

• South Africa’s state-owned Central Energy Fund acquired the flood-damaged 180,000 barrels-per-day Sapref refinery in 2024 from BP and Shell for a token 1 rand ($0.0617).
• CEF said it plans to revive the refinery’s liquefied petroleum gas import and distribution business and lease out existing storage tanks to generate early revenue.
• The plan is to upgrade the refinery to a 400,000 to 650,000 bpd plant with National Treasury approval and a final investment decision targeted for 2027/28, the CEF said in a statement late on Monday.
• The total refinery investment is expected to cost around $7.15 billion, CEF said, without providing funding details.
• One banking source and one government source said they were discussing potential financing from the pan-African Afreximbank, among others.
• The CEF is weighing plans to revive its Mossel Bay gas-to-liquids refinery, which has been idle since 2020 due to a shortage of domestic gas feedstock.
• The Mossel Bay GTL refinery, operated by PetroSA and now part of the South African National Petroleum Company, will be restarted in phases.
• Phase 1 targets around 18,000 bpd at an estimated investment of 5.8 billion rand.
• Phase 2, targeting production of 46,000 bpd, will require an extra R8.5 billion ($525.35 million).

($1 = 16.1797 rand)