South Africa: BP Makes Statement on Coega Refinery
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Wednesday, 24 February 2010 |
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BP South Africa has called for all options to be considered before a
new 400 000 barrel-a-day oil refinery is built at Coega in the Eastern
Cape.
Chief executive Sipho Maseko said the government should review all
long-term regional supply options for petroleum products before any
decision was made. "Government must consider expansion of
existing refineries before embarking on the construction of a
full-blown Greenfield refinery," BP South Africa said.
"There is enough surplus refinery capacity in the world and it is
likely to remain so beyond 2020. It therefore makes no sense to
burden South African taxpayers when better and cheaper options are
available than building a new, expensive refinery."
The surplus were four times bigger than those for crude oil, so it was
doubtful that energy security in South Africa would be better served by
building a new local refinery. Maseko said the real issue were in
pipeline and terminal cum logistics infrastructure.
Maseko said BP Africa's international experience told the company that
it was simply not feasible to construct and commission a new refinery
by 2014, "even if the decision was taken today, and certainly the full
cost of such a project is quite likely to be over 50 percent more than
what is being projected".
Maseko noted that, so far, the extent of the world petroleum product
surplus had not been highlighted. "Nor has anyone taken note that no
other country is planning major refining projects for at least the next
decade," he said. (PW ED – with the exception of Asia!).
No notice had been taken of the cost of building a new long distance
pipeline from Coega to the inland market. "Nor has it been acknowledged
that such a pipeline will be surplus to our needs, given that the
existing infrastructure in Durban can be leveraged at low cost, in
particular the new multi- product petroleum pipeline (NMPP) pipeline,
funded by the taxpayer and motorists, will meet inland demand at least
until 2030."
State-owned PetroSA received a manufacturing licence in October 2008
from the department of minerals and energy for the firm's Project
Mthombo a 400 000 barrel-a-day oil refinery to be constructed at Coega
at a cost of US 9 billion.
PetrolWorld 210210
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