Business Insider Edition

PetroSA says its Mossel Bay plant will run out of gas by December 2020 - placing 1,500 jobs at risk

Business Insider SA
 Oct 02, 2019, 07:02 AM
PetroSA's Mosselbay facility (supplied)
PetroSA's Mosselbay facility (supplied)
  • PetroSA’s gas-to-liquids refinery in Mossel Bay will reportedly run out of natural gas by December 2020. 
  • This will affect 1,500 direct jobs. 
  • State-owned PetroSA reportedly has several initiatives planned to keep the plant's doors open. 
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One of the world’s largest gas-to-liquid refineries, in Mossel Bay, is reportedly set to run out of natural gas by December 2020, placing 1,500 local jobs at risk. 

State-owned PetroSA's facility is operating well below its 36,000 barrels per day, Reuters reported.

A roughly R15 billion offshore drilling campaign in the area was also halted because it didn’t deliver replacement reserves. 

Netwerk24 reported that in a presentation to the National Assembly, the cash-strapped PetroSA said it would cost R9.8 billion to close the facility, of which it only has R2.4 billion available.

A closure would effectively bring the Mossel Bay economy to a standstill. 

The department of energy, PetroSA, and the Central Energy Fund did not respond to requests for comment. 

Also read: Treasury wants to deregulate the petrol price - but an analyst believes this will not bring cheaper fuel, only more price volatility

PetroSA, which is running at negative cash flow, said it is considering several initiatives to keep the facility’s doors open, Africa Oil & Power reported.

These include reaching out to French oil giant Total after it discovered a huge offshore field containing gas condensate off the South African coast.

IOL reported that PetroSA is also considering extending a gas-to-power facility at Coega, outside Port Elizabeth, to support the gas-to-liquids plant in Mossel Bay.

Another option would be to convert the Mossel Bay facility into a refinery for crude oil at a cost of roughly R4.4 billion, which would see fewer people employed at the facility, Netwerk24 reported.

(Compiled by James de Villiers)

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