KBR to Conduct Feasiblity Study to build refinery in south africa

KBR to Conduct Feasibility Study to Build Refinery in South Africa

11-30-2007

KBR today announced that it has been awarded a contract by PetroSA to conduct the pre-feasibility study to build a USD 6 billion crude oil refinery in Coega, Port Elizabeth.

The proposed crude oil refinery, called Project Mthombo, is expected to come on stream in 2014/2015. Project Mthombo, which could produce more than 200,000 barrels of fuel per day, will be one of the largest post-2010 investments in South Africa.

“KBR has a well-established track record developing downstream projects, accessing global resources and crude oil refining. We look forward to applying this expertise to PetroSA’s world-scale refinery project,” said John Quinn, President, Downstream for KBR.

The pre-feasibility study focuses on determining the economic optimum configuration for the refinery including crude oil type and costs, required product slate, prices and specifications, and capital and operating costs. The study is expected to take about six months to complete and will be conducted out of KBR’s Houston offices with support of KBR South Africa and Ilitha, a local engineering company. After the configuration has been approved, Project Mthombo will move on to the feasibility phase, which will define the engineering scope of the refinery.

The project will also generate approximately 20,000 direct and indirect jobs in one of the most impoverished provinces in South Africa, beginning with numerous South African personnel assigned to work on the study. “PetroSA is using this opportunity to develop job skills capacity in South Africa and has selected several promising candidates from previously disadvantaged South Africans, who will be assigned to KBR for the duration of the study. The development of these engineers, who are essential for the successful construction and operation of the refinery, is part of a well-defined strategy by PetroSA in anticipation of future needs,” said Jorn Falbe, vice-president, new ventures—midstream for PetroSA.

Project Mthombo underpins South Africa's security of energy supply and reduces South Africa's dependency on imported automotive fuels. Project Mthombo, which is nominally sized for 200,000 barrels of fuel per day to satisfy the South African demand, could be expanded to allow for exports or other growth opportunities and could be integrated with downstream petrochemical opportunities.

KBR is a global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors. The company offers a wide range of services through its Upstream and Downstream, Technology, Services, Government and Infrastructure and Ventures business segments.