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Govt buys Sapref assets

SHELL Downstream South Africa (SDSA) and bp Southern Africa have sold their assets located at the Sapref refinery south of Durban to the Central Energy Fund, Mineral Resources and Energy (DMRE) Minister Gwede Mantashe announced on 25 May.

The DMRE said that the sale includes the SDSA and bpSA interests in the Sapref land and other associated assets, which include crude and finished product tanks, process units, pipelines to and from Sapref to Island View terminal, and the Single Buoy Mooring (SBM) for crude imports.

However, the sale excludes Sapref (Pty) Ltd, bp’s marketing businesses, the Island View terminal Operations and the lubricants blending and grease manufacturer, Blendcor.

The Central Energy Fund (CEF) is a Schedule 2 state owned energy company reporting to the DMRE. Its largest subsidiary is PetroSA.

The DMRE says, “Acquisition of these assets will form the hallmark of CEF’s investment and growth strategy in the energy value chain geared to lay a solid foundation to address the challenges that lie ahead in the security of South Africa’s energy future.

“Entrusted with the responsibility of securing energy supply to power the South African economy, the DMRE has seriously noted with concern the declining local refining capacity, which resulted in the country becoming a net importer of refined petroleum products.

“This new emerging trend was not only threatening the country’s economic stability and security of supply of petroleum products, but also meant the exportation of jobs that are so needed in the country.”

The DMRE acknowledged the tireless efforts of the negotiating teams in concluding the deal despite several setbacks (such as the KZN floods) which were beyond their control.

In other PetroSA news, Bloomberg reports that the state-owned company said that its deal with a unit of Russia’s Gazprom Group to revive its gas-to-liquids refinery in Mossel Bay has moved into the feasibility stage.

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