PETROSA has partnered with China’s Sinopec Group to work together in pushing the building of the proposed Mthombo crude oil refinery project. Construction of the project, which will be the biggest refinery in Africa, is expected to start in 2012, with the refinery to come on stream by 2015. The refinery, which will be in the industrial port of Coega near Port Elizabeth, will have a 400 000 barrels a day capacity and will ensure security of fuel supply in the country.

The agreement will involve the commissioning of studies over two phases. The first phase will focus on market studies, the review and selection of a business case, while the second will develop a business case that is expected to prepare the project for the important Front End Engineering Design (FEED) stage. FEED refers to the basic engineering which is conducted after the completion of a conceptual design or feasibility study of a project. At this stage, before the start of EPC (Engineering, Procurement and Construction), various studies take place to figure out technical issues and estimate rough investment cost.

The agreement has made it possible for PetroSA and Sinopec to contract Sinopec Engineering Incorporation to conduct the studies on behalf of the two companies. The two phases are expected to last 18 months. In preparation for the studies, PetroSA says they have also established a steering committee to guide and manage the process.

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