Page 4 - AfrOil Week 20 2022

AfrOil COMMENTARY AfrOil

Astron’s Cape Town refinery was damaged in an explosion in mid-2020 (Photo: Astron)
Continued refinery closures lead to

import headaches for South Africa

The country’s 700,000 bpd of refining capacity are in disarray amid closures, midstream bottlenecks

SOUTH Africa’s fuel imports are set to increase bpd Mossel Bay gas-to-liquids (GTL) facility.
dramatically as challenging headwinds bring However, various factors have conspired to sig-
WHAT: about the closure of more of the country’s nificantly reduce usability and utilisation rates
One refinery has closed refineries. With imports already accounting during the past two years.
permanently, another is for almost two thirds of petroleum product
shuttered pending sale demand, industry reports suggest that shortages Refining downturn
and a third is in limbo are likely to grow more acute, particularly in the A country overview by downstream-focused
awaiting a decision on country’s interior. consultancy Citac presented data suggesting
its fate. While having already come under economic that output from South African refineries had
strain, refinery owners have been shutting down fallen from 438,000 bpd in 2018 to around
WHY: operations as the government moves to mandate 240,000 bpd in 2021, with this figure seen drop-
Poor economics have the use of ultra-low-sulphur gasoline and die- ping to just 219,000 bpd this year.
been exacerbated by
stringent new fuel sel from next year, a move that would require Citac highlighted the main factors in the
regulations, stifling any existing facilities to invest heavily just to keep decline as “the closure of the Engen Refinery [in
remaining commercial the lights on. Durban], the lack of gas or economically viable
interest. In 2020, the South African downstream condensate feed to run the PetroSA refinery, and
comprised four refineries – two in Durban, one the explosion at the Astron Refinery [in Cape
WHAT NEXT: in Sasolburg and another in Cape Town – with Town] in mid-2020.” It added that the decline
While the future for a theoretical nameplate capacity of 507,000 bar- had been more rapid because of Engen’s deci-
refining is bleak, and rels per day (bpd), as well as the 160,000 bpd sion to close its refinery in December 2020
South Africa must act Secunda coal-to-liquids (CTL) plant which rather than 2023 following years of losses and a
quickly to avoid major utilises Sasol’s proprietary Fischer-Tropsch fire. The facility will be converted into an import
supply issues. (FT) technology and NOC PetroSA’s 45,000 terminal.

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