PetroSA signs deal with Sinopec on Project Mthombo

01 Feb 2016 | Admin Author

State oil company, PetroSA and China's state-owned petroleum and petrochemicals company, Sinopec, signed a two-year agreement this morning on Project Mthombo, the multi-billion rand oil refinery planned for the Coega Industrial Development Zone.

The two companies said in a joint statement on Tuesday that the framework agreement would enable them to move forward with the crude refinery project.

It was also agreed that the Industrial Development Corporation (IDC) would be brought into the next phase of the development.

This is the second agreement signed by the two companies.

In May last year they signed an agreement in terms of which they would work
together to develop a business case for Project Mthombo that is one of the flagship projects for both Nelson Mandela Bay and the Eastern Cape Government.

The agreement also makes provision for cooperation in oil and gas exploration as well as the investigation of downstream opportunities.

Reports quote PetroSA chairman Dr Benny Mokaba as saying that the Framework Agreement was an important building block in making Project Mthombo a reality.

The announcement follows a statement in the Strategic Plan of the Department of Energy for 2013/14 tabled in Parlia-ment, that the feasibility studies and front end engineering design for Project Mthombo were expected to be progressed during the year.

The department said it also intended to have the Draft Liquid Fuels Infrastructure road map approved by Cabinet in the first quarter of the financial year and released for public comment.

It also follows a statement by Premier Noxolo Kiviet in her State of the Province Address last month that the viability study for the project had found that the oil refinery is commercially viable at 300 000 barrels a day, the initial intention was to produce 360 000 barrels a day.

(Source: Metrominute - to subscribe mail netminutes@iafrica.com)