State-owned oil and gas company PetroSA has once again made a strong case for a fuel products pipeline from Coega to Gauteng, saying the facility would benefit South Africa.
PetroSA has been mulling over a feasibility study for a pipeline that could transport refined petroleum products from its planned 400,000- barrels-a-day refinery at Coega to inland markets.
That would be in addition to the R11,2bn multiproduct fuel pipeline from Durban to Gauteng that transport and logistics group Transnet is building. The pipeline is due for commissioning in 2010.
"We need to co-ordinate the investment in pipelines in SA. We need to work closely with Transnet," Jorn Falbe, PetroSA vice-president for new ventures midstream, said Wednesday.
Falbe said Transnet was a key partner in the integration of logistics in the planned refinery. The logistics, he said, included port investments, pipelines and rail infrastructure.
" The two pipelines can be complementary. While the Durban-to-Gauteng pipeline is a highway, the Coega-to-Gauteng facility can have several hubs at different cities," he said.
Falbe said the $11bn Project Mthombo was not dependent on the Coega-Gauteng pipeline "although (the pipeline) is a further optimization ... We definitely see the benefits of a second pipeline".
The PetroSA refinery, due for commissioning in 2015, is seen as central to the government's efforts to ensure security of supply of liquid fuel products. The project is expected to lower the country's import bill and to significantly reduce South Africa's dependency on imported vehicle fuels as demand increases.
Falbe said half of the refinery's capacity - about 200,000 barrels a day - would be geared toward the South African market.
The rest, he said, would be exported to sub-Saharan markets, where PetroSA would compete with refineries in the Middle East and India.
Falbe said the increased capacity in SA could threaten the survival of inefficient refineries that had been supplying the sub-Saharan market.
Oil multinational Shell said last week PetroSA's decision to increase the refinery's capacity from 250,000 barrels a day to 400,000 barrels a day could hurt existing refineries, resulting in reduced output and even closure.
Falbe said the Coega facility would be globally competitive.
He said the refinery's configuration was in line with global standards and would have lower sulfur, benzene and petrol content.
Commenting on the effect the global financial turmoil would have on the project, Falbe said HSBC, PetroSA's financial adviser on the project, had assured the company the project was viable "because it is world-class and strategic."
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