State says PetroSA is delaying refinery building

2012-10-06 13:10

Government has washed its hands of allegations by PetroSA that it is the cause of the delay in getting the R82 billion Mthombo Project at the Coega industrial development zone in Port Elizabeth off the ground.

The department of energy has instead blamed PetroSA for the apparent feet-dragging.

The department said this week that it was fully committed to the project and wanted it fully operational by 2020.

This renewed commitment by government, which is the major shareholder in the project, comes soon after PetroSA said South Africa could no longer afford to keep postponing the project’s implementation.

This gave the impression that government was not prioritising the project.

The fuel parastatal’s chief executive, Nosizwe Nokwe-Macamo, compared the anticipated fuel shortage    resulting from the delayed commissioning of the crude-oil refinery to the current Eskom energy crisis, which was caused by government’s delay in building new power stations.

Responding to an article in City Press last Sunday, the energy department this week said: “The department
has always maintained that a new oil refinery needs to be operational by 2020.

“PetroSA is busy with a review of their business case. So in actual fact, the current pace of the project is squarely in the hands of PetroSA.

“There is no delay in the project as the department of energy awaits the outcome of the business case review, which is expected to be completed by the end of 2012, at which point the board (of PetroSA) would then have to revise their feasibility studies.”

PetroSA also confirmed this week that the current case studies, whose first phase had already begun – and which are being conducted jointly with Sinopec, a Chinese state-owned integrated energy and chemical conglomerate – have to be completed first and then presented to their board for approval before being submitted to the shareholder, which is the department of energy.

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