http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.03Change: -0.03
R/$ = 10.64Change: -0.03
Au 1289.55 $/ozChange: -0.37
Pt 1425.50 $/ozChange: 1.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 07, 2012

SA will need extra oil refining capacity in future – Sapia

Back
Construction|DURBAN|Gauteng|Port|Africa|Bitumen|CoAL|Diesel|Gas|Petrochemicals|PetroSA|Pipelines|PROJECT|Projects|Road|Roads|Sasol|Sonangol|Transnet|Transnet Pipelines|Africa|Chad|Gabon|Iran|Islamic Republic Of Iran|Mozambique|Nigeria|South Africa|United States|Zimbabwe|GTL Plant|Mthombo Refinery|Building|Crude Oil|Crude Oil Feedstock Market|Logistics|Oil|Oil Refiners|Oil Refinery|Petrochemicals|Petroleum By-products|Products|Transport|Mossel Bay|Avhapfani Tshifularo|Pipelines|Limpopo|Diesel |Pollution Control
Construction|Port|Africa|Bitumen|CoAL|Diesel|Petrochemicals|Pipelines|PROJECT|Projects|Road|Roads|Transnet||Africa|||Building|Logistics|Petrochemicals|Products|Transport|||Pipelines||
construction|durban|gauteng|port|africa-company|bitumen|coal|diesel-company|gas-company|petrochemicals-company|petrosa|pipelines-company|project|projects|road|roads|sasol|sonangol|transnet|transnet-pipelines|africa|chad|gabon|iran|islamic-republic-of-iran|mozambique|nigeria|south-africa|united-states|zimbabwe|gtl-plant|mthombo-refinery|building|crude-oil|crude-oil-feedstock-market|logistics|oil|oil-refiners|oil-refinery|petrochemicals|petroleum-by-products|products|transport-industry-term|mossel-bay|avhapfani-tshifularo|pipelines|limpopo|diesel|pollution-control
© Reuse this



South Africa will eventually have to build an additional refinery, asserts South African Petroleum Industry Association (Sapia) executive director Avhapfani Tshifularo.

He points out that the country continues to lead in terms of servicing neighbouring countries’ fuel needs and in moving towards introducing Clean Fuels 2 specifications by 2017.

However, in the near future, oil refiners and government will have to make the decision to increase local refining capacity, either through upgrades or expansions to existing refineries, or through the building of new refineries, he states.

Tshifularo believes that investment in the expansion and upgrade of the existing refineries, as well as in the building of a new refinery, is necessary, as the expansion poten- tial for the existing refineries is limited.

With its current refining capacity, South Africa is unable to produce sufficient fuel to meet local demand, which forces the country to import refined product, he says.

National oil company PetroSA agrees that demand for refined fuels in South Africa already exceeds supply and it expects the increase in demand to continue. Diesel consumption is expected to increase by 4.5% a year and petrol consumption by 1% a year between now and 2020.

Tshifularo says the investment by local refineries to meet the Cleaner Fuels 2 specifications will not change this, as the country continues to import refined product.

PetroSA states that South Africa will have to import 180 000 bbl/d of petrol and diesel if no significant investment is made in local refining capacity.

Sapia points out that planning is under way for several new refineries to be built in Africa, which will improve the continent’s overall refining capacity.

The proposed projects include PetroSA’s 360 000 bl/d Mthombo refinery; the 50 000 bl/d Port-Gentil oil refinery, in Gabon; Angolan State-owned oil firm Sonangol’s 200 000 bl/d Lobito oil refinery; as well as other projects in Nigeria, Côte d’Ivoire, Chad, Mozambique and Zimbabwe.

Meanwhile, Tshifularo notes that one of the challenges to increasing local refining capacity is that refiners will require an increased amount of crude feedstock. This, in turn, will increase the risk of exposure to disruptions in the global crude oil feedstock market.

The recent European Union- (EU-) and US-led trade sanctions against Iran on the export of its crude oil are an example of disruption in supply.

Meanwhile, by increasing fuel production capacity, local refineries will also increase their output of petroleum by-products, such as bitumen, which is used in road construction and which is often in short supply in South Africa.

Tshifularo notes that oil refinery upgrades and expansions will also create revenue for the refineries and possibly create short-term employment during construction and long-term employment as a result of the additional capacity.

He believes, however, that South Africa can rule out the construction of new coal-to-liquids (CTL) and gas-to-liquids (GTL) plants in the near future.

Petrochemicals group Sasol in 2010 put its proposed 80 000 bl/d Project Mafutha CTL project in South Africa’s Limpopo province on hold, while it sought a commercially viable carbon capture and storage (CCS) solution.

Further, there is no talk of the expansion of PetroSA’s GTL plant in Mossel Bay, owing to gas feedstock concerns that could affect the sustainability of the refinery.

As a result, Tshifularo states, all fingers point to the possible establishment of PetroSA’s Mthombo refinery.

Outlook
Sapia expects the outlook for the oil refineries sector to change quite significantly over the next three to five years, with the petroleum sector’s contribution to the economy being driven by three key investment areas – State-owned freight logistics group Transnet Pipelines’ new multiproduct pipeline (NMPP), the implementation of air-quality regulations in line with minimum emission requirements and the Clean Fuels 2 specifications.

Transnet Pipelines’ R23.4-billion NMPP, which replaces the existing and ageing Durban–Johannesburg fuel pipeline to transport petrol, diesel and jet fuel from Durban to Gauteng, will be fully opera- tional by December 31, 2013.

“The new pipeline will change the way people do business once it has been fully commissioned, as it will ensure the inland demand for fuel is met and road congestion is eased by reducing the number of fuel tankers on the roads,” says Tshifularo.

Meanwhile, the country’s response to air-quality regulations, such as the lowering of carbon dioxide (CO2) and other greenhouse-gas emissions, in line with minimum emission requirements, will require significant investment by industries and may contribute to activity in the construction sector through the implementation of air-pollution control solutions.

The country’s move to implement Clean Fuels 2 specifications by 2017 will lead to significant investment over the next three to five years, states Tshifularo.

“Currently, investment in implementing the Clean Fuels 2 specifications by refineries is still quite uncertain, as it is not guaranteed that all refineries will invest in the upgrades. As a result, the successful implementation of Clean Fuels 2 is still strongly determined by government’s decision on possible financial assistance,” he explains.

The increased legislation for the liquid fuels sector – such as the minimum emission standards as outlined in the Air Quality Act; the Cleaner Fuels 2 specifications; and fuel manufacturing, and wholesale and retail regulations, which determine the retail and wholesale margins – has been challenging to maintain and implement, says Tshifularo.

He notes that issues which will continue to impact significantly on the petroleum industry in the next five to ten years are climate change, greenhouse-gas emissions mitigation, enter- prise and skills development, as well as attempts to further lower CO2 emissions.

“The push by the Clean Fuels 2 specifications to reduce the sulphur content in fuels from 500 parts per million (ppm) to 10 ppm will not come to an end after 2017. It will be followed by a move to tighten the fuel specifications further,” concludes Tshifularo.

Edited by: Chanel de Bruyn
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Oil Refineries News
Oil and petrochemicals company BP in June completed the sale of its Carson, California refinery and related logistics and marketing assets in the region to Tesoro Corporation for about $2.4-billion as part of a plan to reshape BP’s US fuels business. Cash proceeds...
Oil and petrochemicals company BP announced in July that it had completed commissioning and start-up of its new 250 000 bl/d crude distillation unit at the Whiting refinery, marking a major milestone in the multibillion-dollar upgrade of the facility in Northwest...
Producers of surfactants, surfactant intermediates, high-purity alumina and related specialty products Sasol Olefins & Surfactants (O&S) announced in July that it has reached an important milestone in the expansion of its capabilities with the production of its new...
More
 
 
Latest News
Deputy President Cyril Ramaphosa
South Africa’s economic transformation and inclusive growth will not result from a single intervention but rather a range of mutually supporting initiatives, Deputy President Cyril Ramaphosa said on Thursday, adding that in many cases this did not require new...
Financial services group Nedbank – the largest occupier of green buildings in the country – has officially opened another Green Building Council of South Africa (BGCSA) 4-Star Green Star-rated building, this time, in Roodepoort. Nedbank Lakeview, which served as...
The Independent Communications Authority of South Africa (Icasa) has outlined the conditions for the assignment of capacity on the digital television channels on Multiplex 3 and any excess capacity on Multiplex 1. The latest regulations overseeing the long-awaited...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
Updated 5 hours ago South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
Updated 5 hours ago There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
Updated 5 hours ago The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
Updated 5 hours ago UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Updated 5 hours ago Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks