Central Energy Fund needs over R8bn to drop SA’s dependence on imported fuels

A general view of the South African Petroleum Refinery (SAPREF) is seen in Durban. Image credit: Reuters/Siphiwe Sibeko/ File Photo

South Africa’s state-owned Central Energy Fund acquired the flood-damaged 180,000 barrels-per-day Sapref refinery in 2024 from BP and Shell for a token R1.

CEF said it plans to revive the refinery’s liquefied petroleum gas import and distribution business and lease out existing storage tanks to generate early revenue.

The plan is to upgrade the refinery to a 400,000- to 650,000-bpd plant, with National Treasury approval and a final investment decision targeted for 2027/28, the CEF said in a statement.

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The total refinery investment is expected to cost around $7.15bn, CEF said, without providing funding details.

One banking source and one government source said they were discussing potential financing from the pan-African Afreximbank, among others.

The CEF is weighing plans to revive its Mossel Bay gas-to-liquids refinery, which has been idle since 2020 due to a shortage of domestic gas feedstock.

The Mossel Bay GTL refinery, operated by PetroSA and now part of the South African National Petroleum Company, will be restarted in phases.

Phase 1 targets around 18,000 bpd at an estimated investment of R5.8bn. Phase 2, targeting production of 46,000 bpd, will require an extra R8.5bn.