Page 5 - DMEA Week 19 2022

DMEA COMMENTARY DMEA

The South African Petroleum Industry new business, Sasol ecoFT, with the intent to
Association (SAPIA) has warned that the new build on our technology leadership, to establish
legislation could make the country’s remaining a significant market position internationally.
refineries obsolete within two years without One of the first applications for the technology
financial support. is likely to be sustainable aviation fuels, where
SAPIA has been working with the govern- new regulations are driving demand, and exist-
ment to find a resolution to issues with funding ing technology and feedstocks have limitations
the upgrade of six refineries in the country to that FT can address.”
allow them to produce cleaner fuels.
It warned in January that refiners would be Import uptick
unlikely to carry out nearly $4bn worth of com- While the future for the Secunda plant may be
bined overhaul work without government sup- secure, it appears increasingly likely that unless
port or permission to raise fuel prices. BP and Shell can find a buyer that has its own
While the Astron facility is set to resume crude to import to South Africa for refining,
operations, there is reason to question its long- Sapref may face a similar fate to the Engen unit.
term importance to Glencore, whose former Citac noted that the planned closures –
CEO, Ivan Glasenberg, once described it as “a “mostly in response to the CF2 regulations”
nice short to have for the trading business”. – would leave the country with a crude and
This leaves Secunda CTL as the one down- condensate refining capacity of just 145,000
stream facility that is neither struggling for bpd, down from the current 432,000 bpd, plus
feedstock, being sold, shutdown nor facing Secunda CTL.
conversion for other uses. The unit is currently With that in mind, the consultant said that
undergoing a $400mn conversion programme South Africa’s monthly refined product imports
that will ensure compliance with CF2 as part of could increase by up to 300%, but it cautioned
a company-wide effort to reduce emissions. In that midstream improvements would need to be
September, Sasol announced it would not invest made in order for the country’s infrastructure to
in new coal projects, setting a target of net-zero cope with the rise.
emissions by 2050. The majority of South African crude oil and
The company’s president and CEO, Fleet- refined products arrive at Durban, from which
wood Grobler, said at the time that shifting its point a pipeline runs to Sasolburg.
feedstock away from coal, towards more transi- Meanwhile, these concerns are raising their
tion gas, and then green hydrogen and sustain- head in public with jet fuel shortages coincid-
able carbon over the longer term, as economics ing with major flooding to hamper operations
improve for these options, “offers agility and at South Africa’s busiest airport, OR Tambo in
enables us to pivot as cost-effective mitigation Johannesburg, which appears bereft of a back-up
levers become available. We are also avoiding plan. Fuel imported at Durban must be certified
infrastructure lock-in and regret capital spend.” by Natref before it can be sent on to OR Tambo, a
He said that its FT technology is particu- process that takes two weeks or more.
larly well-suited to playing a meaningful role If the bulk of South Africa’s refining sector is
in a low-carbon future, with attractive new and doomed, the authorities would be well advised to
emerging value pools. act quicky to improve the midstream or the fuel
“Against this backdrop, we are setting up a supply squeeze will only intensify.™

Week 19 12•May•2022 www. NEWSBASE .com P5