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Durban refinery could be closed for months after fire

Home Business Management Disaster Management Durban refinery could be closed for months after fire

IT is likely to be several months before the Engen refinery in Durban, shut down after a fire on 4 December 2020, is operating again. This, combined with the closure of another major crude energy refining plant in Cape Town in July, also after a fire, has put a severe strain on South Africa’s refinery capacity.

That’s according to Avhapfani Tshifularo, executive director of the SA Petroleum Industry Association (SAPIA), who said this means the country will be more reliant than ever on imports for the foreseeable future.

The Department of Mineral Resources and Energy says it will conduct an assessment of petroleum products supply after the fire at SA’s second-largest crude oil refinery in south Durban.

The 120,000 barrel-per-day (bpd) refinery halted operations as investigations started into the cause of the blaze, which was preceded by an explosion hear all around the city. Engen said it was taking measures to ensure security of supply.

The refinery shutdown comes as South Africa seeks to restart an economy hard hit by COVID-19. The country is already a net importer of crude oil and petroleum products, and according to SAPIA’s Tshifularo, this dependence is only likely to deepen.

“It goes without saying that if we lose current refinery capacity, more products will be imported to ensure security of supply,” he said.

Speaking to Cape Talk’s Refilwe Moloto on 10 December he said there was likely to be sufficient stock of petrol and diesel to avoid shortages over the next few months, thanks to the COVID-induced slowdown and the festive season shutdown of major industries.

He added that contingencies were in place to ensure that farmers in the midst of one of their busiest periods would be provided for.

He also gave the assurance that thanks to import price parity policies, consumers wouldn’t be coughing up more at the pumps for fuel, despite the uptick in imports.

But the shutdown of two plants which account for almost a third of South Africa’s refining capacity has cast further doubt on the future of the local refining industry.

Even before the fire, Engen confirmed that it was considering its options for the Durban refinery after rumours surfaced earlier this year that it planned to shutter the plant for good in 2023 and convert into a fuel storage terminal.

The current shutdown comes at a crucial time as SA looks to kick-start an economy hit by the Covid-19 pandemic.

Asked when he expected the Engen facility to open again, he said it was likely to be “several months at least”, pointing out that the Astron Energy refinery in Cape Town was still closed after the fire in July which killed two engineers. “These things take a long time. The authorities need to conduct a thorough investigation and so do the companies themselves.”

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