So said PetroSA CEO Nosiwe Nokwe-Macamo, with reference to the the Mthombo refinery, at a business breakfast hosted by the Nelson Mandela Bay Business Chamber this morning.
The only tiny problem with that assertion is that we don’t know when the go-ahead will be given for the commencement of construction. At present it is estimated that the project is worth R10 Billion. Put that into perspective by saying that it is the value of 100 new soccer stadiums.
The case for a new refinery is built on a number of premises:
- South Africa is an importer of fuel
- Present refineries will have to undergo upgrading and retrofitting to meet the requirements of the EURO 5 and Euro 6 regulations
- The hope that Shale gas will be discovered in Algoa Bay
- The uncertainty of gas supply in the Mosgas concessionary area
- Securing fuel supply stability for South Africa and SADEC
According to PetroSA:
Project Mthombo is a PetroSA initiative to build a world-class crude refinery in the Coega Industrial Development Zone in the Eastern Cape. Once built, it will be the biggest crude refinery in Africa and it will provide national security of supply for South Africa’s future fuel requirements. In addition, it will bring much needed investment and job opportunities to an area facing significant socio-economic challenges.
National demand for refined fuels already exceeds South Africa’s refining capacity and demand is set to increase further: Diesel consumption is forecast to grow at 4.5% per annum and petrol consumption at 1% per annum between 2012 and 2020.
It is estimated that by 2020 South Africa will have to import 180 000 barrels per day of gasoline and diesel if there is no significant investment in local refining capacity.
Importing refined fuel will have a negative impact on the country’s foreign exchange reserves and makes national supply vulnerable to external factors.
To address this issue, the South African government has introduced the Energy Security Master Plan, which calls on PetroSA to provide strategic leadership to achieve security of supply.
According to the Eastern Cape MEC for Economic Development, Environmental Affairs and Tourism (DEDEAT), Mcebisi Jonas; “The establishment of a refinery is a critical project fo rthe Eastern Cape”. Jonas went on to applaud the NMBBC for being the uniting voice in driving and keeping the ‘hope’ of Project Mthambo alive for the past three years.
Three years ago the NMBBC established a special committee under the leadership of NMMU Vice-Chancellor Derrick Schwartz that today continues to lobby government and business leaders for the Mthombo refinery to be sited at Coega.
Mcebisi Jonas cited four factors stifling economic growth in the Eastern Cape:
- A small primary sector – saying that even our agriculture sector was the size of Gauteng’s
- A large population in the former Bantustans
- Nelson Mandela Bay and Buffalo City are the two slowest growing metros in the country – bucking the trend that coastal cities grow faster than inland
- The Eastern Cape has historicaly had the lowest share of investment by Public Corporations.
Jonas pointed out that; “The Nelson Mandela Bay Metro needs to deal with certain basics ahead of this project, for instance, water supply.” and “We must push top ensure that the decision [to give the go ahead for Project Mthombo] should be taken now”.
Article source: http://mype.co.za/new/2012/09/we-are-going-to-build-it-in-coega/