Johnathan Paoli
Cabinet has announced its approval of a partnership between Russia’s third-largest bank Gazprombank and PetroSA to restart its gas-to-liquids refinery in Mossel Bay, Cape Town.
Minister in the Presidency Khumbudzo Ntshavheni said on Monday that the partnership would effectively assist in the lowering of the price of fuel and was in line with the country’s partnership with other BRICS nations in order to increase trade and investment between the member states.
Ntshavheni said that the Cabinet was not aware of the fact PetroSA reportedly ruled out 19 out of 20 bidders for the R3.7 billion project, leaving Gazprombank the sole preferred investment partner.
“Cabinet noted the selection of Gazprombank is still dependent on the final investment decision that will be informed by a joint bankable business case as well as the terms and conditions which are expected to be finalised in April 2024,” Ntshavheni said.
However, Gazprombank is currently one of a number of institutions under sanctions by the US Treasury department due to Russia’s war in Ukraine.
Ntshavheni said that the Cabinet weighed up the risk of secondary sanctions on the country and was not prepared to withdraw from the BRICS partnership, pointing to the fact that the EU and US had oil partnerships with Russia.
The recommencement of the refinery is expected to retain at least 2000 jobs whilst creating 4000 more.
The 45 000 barrel-per-day Mossel Bay plant has been under care and maintenance for several years as dwindling offshore gas resources meant the plant could no longer operate.
PetroSA has been looking for investors to try to get its flagship plant working, following the closure of its two largest refineries Sapref and Enref in Durban due to structural, operational and management failures.
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