The spectacular collapse of South Africa’s petrol refineries

South Africa used to produce the majority of its own fuels, however, a spate of refinery closures has reduced the country’s once thriving refining industry to a shadow of its former self.

As many as six refineries once called our country home, satisfying around 80% of the nation’s propellant demand with a production volume of over 700,000 barrels per day:

The first domino to fall was the Astron Energy refinery in June 2020, located in Cape Town, Western Cape.

When the facility was switched back on following routine maintenance it suffered from a massive explosion that took two lives, and it was immediately shuttered for investigations and repairs. A subsequent inquest found that the incident occurred due to gas valves that were not properly closed, allowing gas to enter a furnace during the start-up procedures, as per Engineering News.

In November 2020, the PetroSA refinery in Mossel Bay, Western Cape, was put on a “maintenance and care programme” and it has remained closed ever since.

The reason for the shuttering was a shortage of available gas and condensate feedstock for the natural gas-to-liquids refinery. With the owners unable to procure materials to continue production, they chose to keep the plant closed until they could secure a partnership to reinstate it.

One month after the PetroSA factory’s demise, the Engen-owned Enref refinery situated in Durban, KwaZulu-Natal experienced a fire outbreak which led to extensive damages.

The company assessed the viability of a complete refurbishment and an upgrade to enable the refinery to adhere to the latest fuel quality and emissions regulations, however, this was deemed “unsustainable.”

Instead, Engen opted to convert the location into an import terminal and product storage facility and cease fuel production for good.

Fast forward to February 2022, BP and Shell announced they would end operations at their joint-owned Sapref plant in Durban for “an indefinite period.”

The companies did not reveal why they were closing the refinery, however, earlier this year, The Conversation reported that severe floods washed hydrocarbons, a vital compound in the production of petrol, out of the refinery and onto a nearby beach, causing environmental damage that would have taken five years to repair and be incredibly expensive.

The facility owners therefore initiated a spending freeze and paused operations until such time a decision on the plant’s future was taken.

An honorable mention; Sasol’s Secunda refinery – which is billed as the world’s dirtiest – was temporarily closed in July 2022 due to a lack of crude oil, but was restarted a few weeks later, wrote Reuters.

As such, the only refinery that has served the South African people continually over the past three years has been Natref, satisfying approximately 30% of the nation’s fuel needs.

Located in Sasolburg, Free State, Natref is owned by Sasol and TotalEnergies, the latter of which is in the process of selling its minority stake to the British Prax Group.

Sapref Refinery in Durban, KwaZulu-Natal

A slow comeback

While the domestic fuel refining industry was in the doldrums over the last few years, things are starting to take a turn for the better.

Astron restarted its plant in early 2023 after two years of inaction, and the company is now supplying a considerable portion of fuel and lubricants to local consumers, including those in the mining industry.

In addition, the Sapref plant was recently sold to the state-owned Central Energy Fund (CEF) for a reported R1.00 with the goal of bringing it back into full operation in an effort to reverse the decline in local refining capacity.

The deal dictated that the CEF take control of all of the Sapref land and associated assets, its crude oil and finished product tanks, and the pipelines connecting the refinery to the Port of Durban’s Island View terminal and offshore single-buoy mooring used for crude imports, reports Oil & Gas Journal.

The CEF has yet to make any public statements regarding the restart of the Sapref facility, however, it communicated to the Fuels Industry Association of South Africa that a restart is definitely on the cards in the near future.

Likewise, PetroSA is seeking partnerships to assist with the refurbishment and reopening of its Mossel Bay refinery.

It tapped Russia’s Gazprom Group for a potential tie-up, with the deal moving into the “feasibility” stage earlier in 2024.

PetroSA spokeswoman Nonny Mashika-Dennison told Bloomberg in May: “The feasibility study for the refurbishment contract with Gazprombank Africa — which will provide an overview of all factors impacting on the viability of the reinstatement of the gas-to-liquids refinery — is currently underway.”

Once these refineries are up and running again, they will also be upgraded to produce cleaner fuels, said the CEF.

Propellants sold in South Africa are not on par with international standards which has seen many modern cars, especially hybrids and petrol autos that adhere to the latest European emissions regulations, not being introduced to our roads.