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PetroSA
Announces New Tender for Coega Refinery Project
07-03-2008
PetroSA, state oil company of
South Africa announces that it is in the process for new tender to build
the Coega Refinery in the Eastern Cape. The company is currently looking for
strategic engineering partner to manage the various project phases. The Port
Elizabeth-based refinery with the capacity of 400 000 barrels a day, will come
on stream in 2014, and is seen as a strategic investment to alleviate South
Africa’s reliance on Durban, which handled 75% of the country’s crude imports.
The company advertised the
multi-million rand tender on Tuesday. CEO
Sipho Mkhize said that
engineering partner would execute the feasibility, front-end engineering design
and project management through to commissioning of the refinery, dubbed Project
Mthombo.
“PetroSA believes that the appointment of one strategic engineering partner to
manage the various project phases will provide enhanced focus and continuity,”
he said.
The company also announced that it had appointed KBC Advanced Technologies as
the project’s technical/commercial adviser and that it would appoint Merchant
Bank as its financial adviser shortly.
PetroSA head of new ventures
Joern Falbe commented that each
phase of the project would be expected to meet targeted milestones to ensure
sustainability and alignment with the company’s objectives in addressing South
Africa’s strategic fuels supply concerns.
The Energy Security Master
Plan - Liquid Fuels, gazetted by the Department of Minerals and Energy recently,
recommended that PetroSA procured at least 30% of all crude oil consumed in
South Africa. The initiative to build a new crude refinery is in part response
to this mandate.
Falbe added that PetroSA also recognised that this mega-project must be fully
leveraged in the national interest to drive much needed engineering skills and
supplier development for the country.
“With this objective in mind, and in addition to standard benchmarked commercial
measures, key selection criteria will require the engineering contractor to
demonstrate their ability, through commitment, proven capability and their
global track record to contribute to this national obligation.”
The South African government gave the project the official stamp of approval in
June, when Minerals and Energy Minister
Buyelwa Sonjica said in her
budget vote that the State fully endorsed the project.
Project Mthombo would be one of the biggest post-2010 investments in South
Africa. It was estimated that the project would generate about 8 000 direct jobs
during operations and 39 000 indirect jobs.
It would also significantly improve South Africa’s fuels import bill.
“This project will further redefine South Africa’s energy landscape. The demand
for automotive fuels in Southern Africa already exceeds the local production
capacity and South Africa is becoming increasingly dependent on the import of
refined automotive products,” Mkhize stated.
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