South Africa will need more than $8 billion to revive two mothballed state-owned refineries, officials told lawmakers on Wednesday, as the country seeks to strengthen energy security and reduce its dependence on imported fuels.
The state-owned Central Energy Fund (CEF) said it plans to invest about $7.15 billion to revive the flood-damaged Sapref refinery in Durban, while additional funding will be required to restart the Mossel Bay gas-to-liquids refinery.
CEF acquired the 180,000-barrel-per-day Sapref refinery from BP and Shell in 2024 for a token one rand after the facility was damaged by floods.
The fund plans to initially revive Sapref’s liquefied petroleum gas import and distribution business and lease existing storage facilities to generate revenue.
It also plans to upgrade the refinery into a facility capable of processing between 400,000 and 650,000 barrels per day, subject to approval from the National Treasury. A final investment decision is targeted for 2027/28.
A banking source and a government source said discussions were under way on potential financing from Afreximbank and other institutions.
CEF is also considering the phased restart of its Mossel Bay gas-to-liquids refinery, which has been idle since 2020 because of a shortage of domestic gas feedstock.
The refinery, operated by PetroSA and now part of the South African National Petroleum Company, would initially produce about 18,000 barrels per day under the first phase, at an estimated cost of 5.8 billion rand.
A second phase, targeting production of 46,000 barrels per day, would require an additional 8.5 billion rand, equivalent to about $525 million.
The projects form part of South Africa’s efforts to strengthen domestic fuel production and reduce its dependence on imported petroleum products.
