Port Elizabeth, South Africa — MININGREVIEW.COM — 10 March 2009 – Good news for South African industry in general – and the mining industry in particular – is that Petro SA’s planned refinery at Coega will be about 20% cheaper to build because of falling building and material costs.
PetroSA chief executive Sipho Mkhize said here that the refinery – known as Project Mthombo – would cost about US$9 billion (R95 billion), compared to the estimated US$11billion (R115 billion) mooted at the pre-feasibility stage.
Fin24.com reports that fewer processing units in the new structure, lower material costs (especially steel), and lower engineering costs will bring about the saving.
Mkhize said the commercial prospects for the refinery were good, thanks to the economic downturn. The Coega refinery would be able to meet South Africa’s total fuel requirements from 2014 to 2021.
At Coega heavy and sour crude oil will be refined to Euro V clean fuel standards. South Africa’s other refineries – some of which are much older than 30 years – would require investments of about US4 billion (R42 billion) to comply with Euro IV standards, Mkhize explained.
Fin24.com says the Coega refinery will be the lowest cost producer in sub-Saharan Africa, but will also comply with the highest standards for clean fuel and the environment.