11 May 2023

Minerals and Energy Minister Gwede Mantashe has confirmed that the department is reviving talks with Saudi Arabia to build a refinery in South Africa to improve the refining capacity, according to Building & Construction News.

The discussions began a few years ago and there was agreement between the two countries that oil giant Saudi Aramco would build a refinery in Richard Bay, on the KwaZulu-Natal North Coast. BP and Shell had announced last year that they were shutting the Sapref refinery in Durban.

Then Premier Sihle Zikalala even said they wanted the government to take over Sapref as the biggest refinery in South Africa provided significant employment. Mantashe, who was answering questions in Parliament this week, said the issue of Saudi Aramco to build a refinery was still on.

“The Durban port has been quite central in terms of petrol facilitation, export and import. But with the blowing up of the Engen refinery that capacity is out and we have converted it into a storage facility, which is not sufficient,” said Mantashe.

He said the Central Energy Fund and Sapref were in discussions to revive the refinery, but then the floods in KZN last April destroyed it. “Restoring it back to production capacity will be quite costly, but the discussions are continuing. Our view is that storage capacity is important, but in South Africa today the biggest outcry is on the resumption of the refinery capacity. We are working on that.

“That’s why when we had the State visit to Saudi Arabia one of the discussions was (to get) Saudi Aramco to build a refinery, which was promised for Richards Bay a few years ago. We are reviving those discussions because it will improve the refining capacity,” said Mantashe.

Mantashe said the visit by President Cyril Ramaphosa to Saudi Arabia in 2018 had dealt with the issue of the refinery.

Read the latest issue

Latest Issue