Deal With Russia's Gazprombank To Fix Mossel Bay Refinery Moves To Feasibility Stage

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deal with russias gazprombank to fix mossel bay refinery moves to feasibility stage

A deal between South Africas state-owned oil company and a unit of Russias Gazprom Group to revive its gas-to-liquids refinery in Mossel Bay on the nations south coast has moved into the feasibility stage, PetroSA said.

'The feasibility study for the refurbishment contract with Gazprombank Africa which will provide an overview of all factors impacting on the viability of the reinstatement of the gas-to-liquids refinery is currently underway,' PetroSA spokeswoman Nonny Mashika-Dennison said in a reply to questions.

The company didnt answer questions on the timing of a final investment decision, which Minister in the Presidency Khumbudzo Ntshavheni in December would likely be finalised by last month.

South Africas cabinet in December endorsed PetroSAs recommendation that Gazprombank Africa be the primary investment partner in the refinery on the countrys southern coast. Production at the 45 000-barrel-a-day facility was halted in 2020 after local reserves were depleted and the company failed to find more natural gas. Offshore discoveries by TotalEnergies SE could potentially supply the plant.

South Africa and Russia are both members of the BRICS group of developing nations, which also includes Brazil, India and China. Pretoria has resisted pressure from the US and its allies to isolate Russia over its invasion of Ukraine, adopting a nonaligned stance in the conflict, and runs the risk of being subjected to secondary sanctions should it enter into a deal with a blacklisted Russian entity.

Refineries in South Africa have been shuttered for a number of reasons, including accidents and flooding. Capacity was wiped out in 2022 with all crude-oil plants out of action and only some have since recovered. TotalEnergies SE plans to expand fuel trade in the country it estimates meets 80% of fuel requirements with imports.