By DEVON MAYLIE
JOHANNESBURG -- South Africa's national oil company PetroSA said Monday it will partner with China Petroleum and Chemical Corp. (Sinopec) to build a new refinery that was originally planned to produce several thousand barrels of oil a day and cost several billion dollars to build.
The two companies, which signed a memorandum of understanding in September, settled the agreement to work together Monday and said they will now carry out a study to finalize the details of the plant.
PetroSA first announced plans to build the refinery, called Project Mthombo, in the Coega Industrial Development Zone in the southern town of Port Elisabeth in 2008.
Development stalled in part because of funding issues. At the time, the company said it expected the refinery to produce 400,000 bpd of oil and cost between $9 billion and $10 billion to build.
A spokesman for PetroSA said final capacity and cost will be determined by a study that is soon to be undertaken.
The study, which will be carried out by Sinopec Engineering Incorporation, will take up to 18 months to complete.
PetroSA said commissioning of the Coega refinery is scheduled between 2018 and 2020.
South Africa is an importer of crude oil, mostly from Iran and Saudi Arabia. Many refineries said they have cut Iranian crude oil imports amid international pressure.
Dow Jones Newswires