Central Energy Fund (CEF) chair Ayanda Noah on Tuesday said the entity is making progress to secure a partner to refurbish its Mossel Bay refinery, with plans in place to resume operations and even expand the facility by late 2026.
“We are looking at the middle of next year to secure partners to get the refinery up and going again. We are hopeful that in 24 months or so, we can get that small refinery up and going again,” said Noah.
Speaking at Africa Oil Week in Cape Town, Noah said the CEF had plans to leverage South Africa’s offshore oil and gas endowments to improve energy security and develop the economy and create jobs.
Asked what South Africa could expect after minister of environmental affairs Barbara Creecy gave approval to TotalEnergies to drill off the southwest coast, Noah said the find and others had the potential to feed into SA’s energy mix and meet its energy needs.
“The discussions are around financing and the price of gas. That gas has potential for gas-to-power. We have the operation in Mossel Bay that needs gas. It is a great opportunity and we can get a decent 500MW in terms of gas-to-power,” she said.
We’ve got six refineries in SA. Only three are operational. Five of them are owned by multinationals and the baby of the refineries, at 46,000 barrels a day, is owned by government
— Ayanda Noah, Central Energy Fund chair
“It’s a strategic find because it is located where we already have infrastructure. There is also an opportunity to expand the refinery. There are opportunities to upscale it after building the one we have of 1.5 TCF (trillion cubic feet) and now we have twice that number.”
Noah said the CEF was aware of the challenges in South Africa’s refinery capacity, including:
- global geopolitical events;
- security of supply;
- continuing the climate change agenda;
- navigating the post-pandemic economy;
- public trust erosion; and
- the economic implications of political instability.
“One major challenge is the baseload generation constraints. There is going to be stage 2 this afternoon, which has probably already started. It has become a normal part of life. It is driven by poor performance of plant. We have poor energy availability factor. Transmission in the north is congested and people cannot connect projects, which creates constraints on the supply side.”
The CEF is interested in acquiring the Sapref refinery in KwaZulu-Natal, she said, as the country only has one government-owned refinery. The limited capacity means the country continues to export jobs and import expertise that could be localised.
“We’ve got six refineries in SA. Only three are operational. Five of them are owned by multinationals and the baby of the refineries, at 46,000 barrels a day, is owned by government.”
In October last year, minister of mineral resources & energy Gwede Mantashe said the government’s plans to acquire Sapref refinery were on hold due to damage to the refinery from flooding.
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