National oil company PetroSA signed a cooperation agreement with the Coega Development Corporation (CDC) on Tuesday, which clarified the roles and responsibilities of the parties in the Coega Industrial Development Zone (IDZ) during the construction and operation of its planned $10-billion crude oil refinery.

The signing of the cooperation agreement was considered another milestone for the proposed crude oil refinery, dubbed Project Mthombo.

PetroSA CEO Sipho Mkhize said that the finalisation of the agreement would give potential investors confidence that the project was developed by major stakeholders in the South African economy and that the project was ready to move to the front end engineering design, or FEED, phase.

The agreement provided for the CDC to recognise PetroSA as the official developer and promoter of the proposed refinery, the establishment of a joint project team and a land allocation agreement for the refinery.

The finalisation of the agreement followed on the heels of the completion of the technical feasibility study for the project.

The new refinery was expected to help ease South Africa's dependence on imported fuels. It would be able to process 400 000 bbl/d, providing a solution to tackle the shortfall in locally produced fuel for the next 20 years.

The Coega refinery will be a major tenant in the Coega IDZ near the new deepwater port of Ngqura. The Coega IDZ is a purpose-built industrial and commercial park covering 11 000 ha.