Saudi Arabia plans to build an oil refinery and petrochemicals plant in South Africa as part of $10bn of investments in the country.
The new refinery would reduce the need for refined product imports and cement Saudi Arabia’s dominant position in South Africa’s oil sector. The Gulf kingdom already supplies 40 per cent of the crude oil consumed in South Africa.
South African energy minister Jeff Radebe said a location for the refinery and petrochemicals plant would be finalised in the coming weeks. The capacity for the refinery is yet to be determined.
South Africa has talked about building an extra refinery for a decade, but it has struggled to agree commercial terms with investors. It has six refineries, four using crude oil and two synthetic fuel as feedstock. Royal Dutch Shell, BP, Total and Sasol are among major refinery operators.
Falih said Saudi Arabia had held discussions with Ramaphosa’s predecessor, Jacob Zuma, about building a refinery in South Africa but the proposed location was not attractive. The two governments are now considering Richard’s Bay in KwaZulu-Natal province, home to South Africa’s major coal export terminal, among potential locations for the refinery.