Page 14 - DMEA Week 17 2021

DMEA TERMINALS & SHIPPING DMEA

Durban refinery to be converted into terminal

AFRICA SOUTH Africa’s oldest oil refinery is to be con- a fire on December 4 last year and Engen had
verted into an import terminal following years of previously said it remained “fully committed to
losses and a fire in December, following which it operating the Engen refinery in a safe and relia-
has not resumed operations. ble manner”, though adding it was “considering
The 120,000 barrel per day (bpd) Durban several options”.
facility is located on the east coast and owned Turnaround maintenance (TAM) was carried
by Engen Petroleum, a subsidiary of Malaysia’s out during a 45-day programme in February
state-owned Petronas. 2018.
The company’s CEO, Yusa Hassan, said that The plant’s product range includes automo-
the decision had been taken following an “exten- tive, industrial, aviation and marine fuels, bitu-
sive strategic evaluation”, with the fuel terminal men, lubricants, chemicals and solvents and,
expected to be commissioned in Q3 2023 and until its closure, it provided around 17% of South
limited refining operations carrying on in the Africa’s refined products.
meantime. Mid way through last decade Engen came
Hassan said: “The conclusion of the strategic close to selling the facility to local state oil com-
assessment is that the Engen refinery is unsus- pany PetroSA before the deal collapsed over the
tainable in the longer term. This is primarily latter’s lack of funds.
due to the challenging refining environment With small and mid-size refineries struggling
as a result of a global product supply surplus to keep up with rapidly changing emissions reg-
and depressed demand, resulting in low refin- ulations, ageing sub-Saharan units have faced a
ing margins, and placing the Engen refinery in mortal challenge. The conversion of the facility
financial distress.” follows a similar move at the Kenya Petroleum
He added that refitting the plant, which Refineries Ltd (KPRL) facility at Changamwe,
opened in 1954, to meet emissions regulations Mombasa in 2013.
would be too costly. The Kenyan unit was used temporarily as a
“Furthermore, unaffordable capital costs to storage facility for crude oil produced under the
meet future CF2 [equivalent to Euro 5] regula- Early Oil Pilot Scheme (EOPS) at the country’s
tions compliance continues to be a challenge for South Lokichar oilfields, which was halted in
the long-term sustainability of the refinery.” mid-2020 and is now being considered for con-
The refinery was shut completely following version to process biofuels.™

P14 www. NEWSBASE .com Week 17 29•April•2021