R50m SAPREF reactor heralds R14bn investment in SA

30 April 2019 | Web Article Number: ME201914414

R50m SAPREF reactor heralds R14bn investment in SA

THE recent arrival in Durban of, a 242-ton, 31-metre-long reactor for the SAPREF refinery, marked not just one of the largest pieces of cargo to go through the port so far this year, but the most tangible sign yet of BP Southern Africa’s plans to invest $1 billion (R14.2 billion) in South Africa.

The R50-million reactor, which has been dubbed “Umkhoma” (the isiZulu word for whale) because of its shape and size, was manufactured in Brescia, Italy and shipped to Durban.

The reactor will enable SAPREF to produce better, low sulphur diesel thus ensuring the future sustainability of diesel supply to the country. Umkhoma, which took over a year to manufacture, is made from vanadium-enriched chrome steel alloy which is a stronger and more durable material.

Project Manager Pensilla Billat was excited that the giant piece of equipment had finally reached Durban after its 25-day trip from Italy. “The reactor was classified as a Super Abnormal Load, thereby requiring road route clearance and special permission for its last journey from the Durban harbour to the Refinery in Prospecton,” she said.

The replacement of the reactor is part of a series of projects to upgrade the refinery to make it more sustainable, competitive and environmentally friendly. Its installation in the refinery will coincide with SAPREF’s scheduled 2019 maintenance shutdown, a bi-yearly event that creates thousands of project-related jobs for Durban communities.

The 180,000 barrels per day SAPREF refinery, South Africa’s largest, is a 50:50 venture between Royal Dutch Shell and BPSA, a subsidiary of British oil major BP.

BP Southern Africa recently announced its intention to invest $1 billion in South Africa in the next five years with more than a quarter of that set aside to upgrade the SAPREF refinery to produce lower sulphur diesel.

Chief Executive Priscillah Mabelane told Reuters BP would invest between R3.5 billion and R4 billion in the refinery upgrade, adding that about 40% of the total $1 billion investment would go on retail activities.

She said the upgrade would make “sure the refinery can meet the new specifications in terms of low sulphur and Marpol regulations.”

The upgrade has been driven by new rules demanding a lower fuel sulphur content and changing customer preferences for cleaner diesel, such as D50 and D10.

Refinery operators have been in long-running talks with government on how to recover costs from upgrading work needed to produce cleaner fuel in South Africa, the continent’s most industrialised economy.

“From an industry perspective we are pushing very hard to ensure that there is policy clarity because we have been on this journey very long, almost a decade,” Mabelane said.

Besides upgrading the refinery, Mabelane said BPSA would expand its retail activities in South Africa. “We are aggressively going to grow our footprint in the country,” she said.

BP was also looking at opportunities to expand its services in Mozambique, where it is the second largest oil company, she said.

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