South Africa could require more than $8 billion to revive two idle state-owned fuel-processing facilities as the government attempts to rebuild domestic refining capacity and reduce its dependence on imported petroleum products.
The Central Energy Fund is pursuing plans involving the Sapref refinery and the Mossel Bay gas-to-liquids facility, both of which have been out of normal production.
Sapref, formerly owned by BP and Shell, has capacity of about 180,000 barrels per day.
The Central Energy Fund acquired the facility in 2024 for a token consideration of about $0.06 after the refinery had suffered flood damage in 2022.
Sapref Expansion Could Cost $7.15bn
CEF intends initially to generate income from existing assets by restarting Sapref’s liquefied petroleum gas business and leasing storage tanks.
Its longer-term ambitions are considerably larger.
The group is considering increasing refining capacity to as much as 650,000 barrels per day, with the project estimated to cost around $7.15 billion, according to the information supplied.
Such an expansion would represent a major increase over the refinery’s previous capacity and would require substantial financing and infrastructure investment.
South Africa has become increasingly reliant on imported refined petroleum products as domestic refinery capacity has declined.
Reviving local processing could potentially improve fuel security, although the economics of large refining investments will remain critical.
Mossel Bay Restart Considered
CEF is also considering a phased revival of the Mossel Bay gas-to-liquids refinery, which has been idle since 2020 because of limited domestic gas feedstock.
The first phase envisages production of approximately 18,000 barrels per day, followed by a second stage targeting 46,000 barrels per day.
Securing reliable feedstock will be fundamental to the plant’s long-term viability.
The government’s broader objective is to strengthen domestic energy security and reduce exposure to disruptions in international refined-fuel markets.
However, mobilising more than $8 billion for the two projects will require the government to demonstrate that the facilities can operate competitively over the long term.
