May. 22, 2012 (China Knowledge) - PetroSA, South Africa's national oil company, yesterday said it will build a local refinery, named Mthombo project, with the cooperation of China's Sinopec<600028
>, Asia's largest oil refiner.
The new refinery will be located at the Coega Industrial Development Zone, in the southern area of Port Elizabeth. Last September, the two partners signed a memorandum of understanding for the Mthombo project.
In 2008, PetroSA announced the Mthombo plans but delayed the project due to capital shortage. The oil supplier said at that time the proposed refinery would cost between US$9 billion and US$10 billion, with a designed crude oil processing capacity of 400,000 barrels per day.
Although the country is a significant exporter of coal, it imports large amounts of oil and natural from its neighboring countries that include Iran, Saudi Arabia, Nigeria and Angola. South Africa has recently received warning from the U.S. government for continuous increase in oil imports from Iran in spite of U.S-imposed sanctions to weaken Iran’s pursuit of nuclear weapons. Iran supplies one quarter of South Africa’s oil imports.
Sinopec Engineering Inc, a unit of Sinopec, will be responsible for the refinery construction that is estimated to last for 18 months, said PetroSA, adding that the plant would be put into operation between 2018 and 2020.