Page 14 - DMEA Week 43 2021

DMEA REFINING DMEA

CEF considers buying Sapref

AFRICA SOUTH Africa’s state-owned Central Energy Following the announcement in April by
Fund (CEF) is reported to be considering buying Engen Petroleum, a subsidiary of Malaysia’s
the South African Petroleum Refineries (Sapref) state-owned Petronas, that it would turn 120,000
joint venture (JV) refinery run by BP and Royal bpd refinery, also in Durban, into an import ter-
Dutch Shell. minal following years of losses and a fire, Sap-
Speaking to Bloomberg, sources said that the ref, Sasol’s 160,000 bpd Secunda coal-to-liquids
CEF is keen to purchase the 180,000 barrel per (CTL) plant and the 107,000 bpd National Petro-
day (bpd) facility in Durban, as South Africa’s leum Refiners of South Africa (Natref) unit in
refineries face a September 2023 deadline to Sasolburg are the country’s only remaining func-
reduce emissions. tional refineries.
Sapref produces gasoline, diesel, marine fuel, Meanwhile, in August, local firm Sasol and
bitumen, base oils and paraffin waxes. One of the its French JV partner TotalEnergies revealed
sources said that green financing could be used they were discussing whether to close or sell the
to pay for upgrades to process cleaner fuels. Natref facility.
Last month the government implemented Following internal assessments, the partners
its Clean Fuels 2 (CF2) legislation, under which have decided that making alternations to the
the new Petroleum Products Specifications and 107,000 bpd facility to comply with CF2 legisla-
Standards mandate the use of ultra-low-sulphur tion is not viable.
gasoline and diesel products from September Sasol’s chief financial officer Paul Viktor said
2023. that current margins mean that the required
The South African Petroleum Industry investment to make Natref comply with CF2
Association (SAPIA) has warned that the new would be “sub-economical.”
legislation could make the country’s remaining He said that converting Natref would be
refineries obsolete within two years without much more costly than the conversion of the
financial support. 160,000 bpd Secunda coal-to-liquids (CTL)
SAPIA has been working with the govern- refinery, which is expected to cost $400mn. Sasol
ment to find a resolution to issues with funding owns a 63% share of Natref, with TotalEnergies
the upgrade of six refineries in the country to holding the remainder.
allow them to produce cleaner fuels. Viktor said that embarking on such a pro-
It warned in January that refiners would be gramme “is not going to happen. We are not
unlikely to carry out nearly $4bn worth of com- going to put that money in at that quantum,
bined overhaul work without government sup- only to not make a return on it,” he added. CF2 is
port or permission to raise fuel prices. equivalent to Euro 5.™

P14 www. NEWSBASE .com Week 43 28•October•2021