SA needs a mega refinery, with the non-operational SA Petroleum Refineries (Sapref) facility possibly being expanded for this, an official of the department of mineral resources & energy told MPs on Tuesday.
The Sapref refinery in eThekwini, which produced 180,000 barrels of oil per day (bbl/d), has not been operating since 2022 when Shell and BP halted operations after it was damaged by flooding. The Central Energy Fund (CEF) took over the facility.
SA has a shortage of refining capacity and relies heavily on imports. In 2023 the country consumed 522,421 bbl/d. The Natref refinery owned by Sasol and TotalEnergies refines 107,000 bbl/d and Sasol’s coal to liquids plant in Secunda 150,000. Engen closed down its 105,000 bbl/d Durban refinery in 2020.
Deputy director-general for minerals and petroleum regulation Tseliso Maqubela told members of parliament’s mineral & resources committee that Sapref would have to be rebuilt but this would not be within five years. In the short term imports would have to increase.
“It's not just about rebuilding it as it was, but rebuilding to expand. So it’s like building a new refinery. We cannot have a Sapref that comes back with 180,000 barrels per day. Sapref must come back as 400,000 barrels or more,” he said.
“The country needs one mega refinery before we say there is now space for electric vehicles.”
Maqubela said CEF was investigating the possibility of expanding Sapref.
He suggested that the rebuilding of Sapref could be undertaken in collaboration with neighbouring countries, for example the Angolan-headquartered multinational oil company Sonangol or Botswana Oil.
DA spokesperson on mineral resources James Lorimer said in response to questions by Business Day that he was reluctant to support any major construction under the auspices of the ANC.
“We’ve seen the corruption that resulted with power stations. I’m also unconvinced that a genuine business case could be made for a new refinery in SA.
“The only people likely to come up with the funding would likely make either overt or covert demands that we would find unacceptable. The Russians or Chinese may demand a heavy price. or collateral, which we would not be prepared to give up.”
Mineral & petroleum resources minister Gwede Mantashe said last year that the government was looking to private investors to develop the Sapref plant.
Another major ambition of the department was to grow the biofuels sector. Licences for this had been issued, but the major issue, Maqubela said, was how companies could recover the cost of blending.
Discussions were under way with the department of transport and Transnet about the future of Island View in eThekwini, a major distribution centre for liquid fuels.
Maqubela said the department had decided to draw up a petroleum master plan so that SA did not just respond to emergencies but had plans for the next 25 to 30 years. The plan would be completed within the next financial year.
“We believe we have identified all the vulnerabilities such as supply to OR Tambo (international airport), possible floods in KwaZulu-Natal and disruption to rail,” he said.
Maqubela also noted the growing culture of noncompliance in the industry such as wholesalers breaking the law by operating as retailers; nonpayment of the annual fee; importation of off-specification fuel; and the adulteration of fuel, which involves mixing paraffin with diesel.
The authorities put a dye into paraffin to identify the problem but culprits boiled it off. Paraffin originating from Zimbabwe also did not have the tracer dye.
Warnings about the withdrawal of licences had been having an affect, he said.
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