PetroSA's proposed new crude oil refinery at Coega will meet the demand for clean diesel for the next 20 years. Seen here is the state owned oil company's gas-to-liquid refinery near Mossel Bay.

When Euro 4 emission standards come into force in 2014, South Africa will have to have clean fuels readily available. At the moment, they are not available in anywhere near the quantities the legislation of Euro 4 standards will demand. Given this, clean fuels will either have to be imported or new refinery capacity will have to be added to the existing refineries in the country.

With this as background, the proposal by PetroSA to commission a 360 000 barrel per day (bpd) refinery in Coega by 2016 with an overriding aim of producing fuel to the highest global standards has been widely welcomed in the transport industry.

Thabo Mabaso, spokesperson for PetroSA tells FleetWatch that Project Mthombo - as the PetroSA initiative is known - will, once operational, certainly satisfy the demand for clean fuels in the country for at least two decades.

“The current status is that PetroSA has made a recommendation to the Ministry of Energy to build a 360 000 barrel per day plant that would mainly produce diesel and petrol (clean fuels to the highest Euro V level) in the ratio 70% to 30%,” he adds.

The project is about to enter the Front-end Engineering and Design (FEED) phase, as the full feasibility study has been completed. This study found that the refinery, which will cost between R63- billion and R77-billion to build, is both technically feasible and commercially viable.

Mabaso says PetroSA will seek to finance R2.4-billion for the FEED phase which would carry on for 18 months. After completion of the FEED phase, a final investment decision will be taken.

Approximately half of the output from the refinery will go to the domestic market, with the other half exported to other sub- aharan African countries. The new plant will also allow for the importation of a series of vehicle types which have been prevented from being brought into the country due to the current low standard of South Africa fuel. PetroSA will obtain crude oil from Venezuela, Brazil and Cuba, as well as African oil-producing countries such as Angola and Nigeria.

Adding to this, PetroSA claim that the use of proven world-class technologies means the refinery will produce fuel 20% to 30% cheaper than imported fuel.

PetroSA is also developing new oil terminal facilities and upgrades at Cape Town, Mossel Bay, Port Elizabeth, Durban and Gauteng and is contemplating a pipeline from Coega to Gauteng.