US engineering group Fluor Corporation announced on Tuesday that it had been awarded the basic engineering services contract associated with the upgrade of the Natref refinery, in the Free State, to produce fuels in line with South Africa’s impending Cleaner Fuels 2 (CF2) specifications. The contract value was not disclosed.

The inland refinery is located in Sasolburg and is a joint venture between Sasol and Total.

Fluor, which is a Fortune 500 company, reported in a statement that the contract was awarded by Sasol Technology, following the completion of a feasibility study and conceptual engineering work.

In June, Sasol estimated that it would need to invest R11.7-billion at the Natref refinery and its synthetic-fuels facilities in Secunda to comply with the CF2 specifications, which will be introduced from July 2017.

The specifications were published in the Government Gazette in June 2012 and are generally aligned with Euro V emission standards.

The South African Petroleum Industry Association estimated recently that an investment of R40-billion would be required for South Africa’s refineries to reduce sulphur, benzene and aromatics levels in the petrol and diesel produced.

In April, energy groups BP and Shell confirmed a R5-billion programme to upgrade the Sapref refinery, in Durban, to meet the CF2 requirements.

Both the Sapref and the Natref projects have been announced ahead of confirmation from the Department of Energy and the National Treasury on the cost-recovery mechanism.

Energy Minister Dipuo Peters indicated recently that work on the cost-recovery mechanism was well advanced and should be finalised soon.

Fluor’s energy and chemicals group president Peter Oosterveer noted in a statement that the company had executed Natref’s initial cleaner fuels project in 2006.

In addition, it had been awarded the front-end engineering and design contract for the CF2 upgrade as Sapref.

At Natref, Fluor would develop, design and build new process units to meet the new fuel specifications. It would also perform detailed up-front planning and develop a project-execution strategy.

The basic-engineering phase would initially be led from Fluor’s new Woodmead head office, in Gauteng, with expertise drawn in from the group’s global network.