The gas-to-liquids (GTL) refinery in Mossel Bay has been given a new lease on life with PetroSA giving the go-ahead for its R8-billion Project Ikhwezi to exploit new gas fields in the seabed off Mossel Bay.

The national petroleum producer yesterday said it had been given approval by the National Energy Regulator of SA (Nersa) after applying in December to secure additional reserves for the GTL refinery.

"It is a major milestone in the project and allows the national oil company to produce natural gas from the F-O development fields when the project is commissioned," PetroSA said.

The new wells are based 40km south- east of PetroSA's offshore production platform near Mossel Bay.

PetroSA's board of directors took a final decision for the company to embark on the project in April last year and production of gas from the first well is planned for mid-2013.

PetroSA group chief executive officer Nosizwe Nokwe-Macamo said Project Ikhwezi was one of the most important initiatives in the company's history.

"Project Ikhwezi creates a critical opportunity for sustaining the operations of our GTL refinery.

"It ensures that we continue to play a vital role in the South African petro- chemicals market. Most importantly, PetroSA will continue to be a source of much-needed employment in the Southern Cape," she said.

PetroSA is the biggest employer in the Mossel Bay area and also supports a number of education initiatives in the Southern Cape as part of its corporate social responsibility plan.

Nokwe-Macamo said Project Ikhwezi had surpassed various critical milestones over the past year.

In November the Environmental Affairs department granted PetroSA environmental authorisation to continue with the project.
In May, a drilling rig contract was awarded to international engineering and technology solutions company Ensco. The drilling operation of the five new Project Ikhwezi wells is scheduled to start in November and should be completed by the second quarter of 2015. PetroSA said it would take about six months to complete each of the five wells, with drilling activity accounting for 63% of the project's total capital expenditure.

At the same time, work will proceed on installing sub-sea pipelines and production infrastructure before linking the pipelines back to the Mossel Bay refinery via the GTL offshore platform.

The sub-sea pipelines will be installed between September and December this year, while the rest of the infrastructure will be installed next year.

MAJOR BOOST: PetroSA's gas-to-liquids refinery has been given the green light to exploit new gas fields in the seabed off Mossel Bay

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(Originally published July 11, 2012, in The Herald.)