Page 5 - AfrOil Week 04 2023

AfrOil COMMENTARY AfrOil

Interested parties were given a deadline to 160,000 bpd Secunda Coal-to-Liquids (CTL)
respond by February 20. A further meeting plant, which utilises Sasol’s proprietary Fis-
with the chosen parties discussing the details cher-Tropsch (FT) technology, and the Mossel
and scale of the plan is to be held on February 7. Bay GTL plant.
The company added that while it has signif- However, various factors have conspired to
icant expertise in GTL engineering, subsurface significantly reduce usability and utilisation
geology, geophysics and reservoir engineering rates over the past two years. A country over-
disciplines, partners will “have an opportu- view by downstream-focused consultancy Citac
nity to interrogate the data during the business presented data suggesting that output from
development process.” South African refineries had fallen from 438,000
PetroSA’s evaluation criteria are heavily bpd in 2018 to around 240,000 bpd in 2021, with
weighted towards state-owned or state-backed this figure seen dropping to just 219,000 bpd in
companies, with at least $200mn of funding 2022.
available. Meanwhile, international oil compa- Citac highlighted the main factors in the
nies (IOCs) with sufficient financial resources decline as “the closure of the Engen Refinery [in
and access to feedstock will also be considered, Durban], the lack of gas or economically viable
albeit with a lower points allocation. In all cases, condensate feed to run the PetroSA refinery, and
PetroSA will award a higher score for parties able the explosion at the Astron Refinery [in Cape While moves
to commit to a rapid project implementation. Town] in mid-2020.” It added that the decline to rehabilitate
Feedstock supply cases under consideration had been more rapid because of Engen’s decision
by PetroSA include LNG imports, future out- to close its refinery in December 2020 rather Mossel Bay
put from the offshore Block 11B/12B and gas than 2023 following years of losses and a fire.
condensate imports, while the RFP puzzlingly The disconnect between hydrocarbon pro- will support
notes the potential construction of a 200,000 duction and downstream capabilities is par-
barrel per day (bpd) oil refinery, presumably a ticularly pronounced in South Africa, which has PetroSA’s
legacy idea following years of stasis on plans to been wrestling with issues around supply and performance,
develop a greenfield unit under the framework prices of jet fuel, diesel and gasoline. With the
of the so-called Project Mthombo. The biofuels refining slates largely out of commission, short- they are
conversion case outlines plans to co-process ages of jet fuel are acute, and there doesn’t seem
bioalcohols at a 12,000 bpd unit. to be an easy solution. PetroSA’s reinstatement not likely to
Considering the scoring mechanisms and of its GTL refinery is unlikely to resolve these
plans, South Africa appears to be targeting issues, as its ability to process gas into gasoline balance the
major gas exporters, and perhaps the most means the supply of key fuels such as diesel and country’s fuel
likely fit is QatarEnergy, which has shown a keen jet fuel will still be severely lacking.
interest in expanding its presence in sub-Saha- slate
ran Africa and is already present in the South Future plans
African upstream sector. The company is part PetroSA was expected to run out of funds and
of the consortium that made the Luiperd and gas by 2022; however, former CEF chairman
Brulpadda gas and condensate discoveries in Luvo Makasi said in 2018 that the company
the Outeniqua basin. could be saved.
He mentioned that year that “we need to set
An industry in turmoil out the production problems at PetroSA, and we
Having come under economic strain in the think by doing that [we will] sort out the capac-
past, refinery owners in South Africa have been ity of the refinery.”
shutting down operations following the gov- The state-owned entity is currently hoping
ernment’s announcement of plans to mandate to secure new gas from Brulpadda and Lui-
the use of ultra-low-sulphur gasoline and diesel perd. Efforts are clearly ongoing to stabilise the
from 2023. It was anticipated that a move like loss-making PetroSA before it is merged with
that would require existing facilities to invest iGas and the Strategic Fuel Fund to create the
heavily just to keep the lights on. new South African National Petroleum Co.
In 2020, the sector comprised four refin- (SANPC). While moves to rehabilitate Mos-
eries – two in Durban, one in Sasolburg and sel Bay will support PetroSA’s performance,
another in Cape Town – with a theoretical it is unlikely to provide the structural changes
nameplate capacity of 507,000 bpd as well as the required to balance the country’s fuel slate. ™

Mossel Bay GTL plant (Photo: PetroSA)

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