PetroSA signs Coega co-op

Johannesburg - State-owned organisations, oil company PetroSA and the Coega Development Corporation (CDC) have signed a co-operation agreement for the planned Coega oil refinery.

PetroSA's 400 000 barrels per day crude oil refinery planned for Coega would be a major tenant in the CDC, the parties said in a joint statement on Tuesday.

The agreement clarified the roles and responsibilities of the parties in the Coega Industrial Development Zone (IDZ) during the construction and operation of the refinery, PetroSA's president and CEO Sipho Mkhize said.

It would give potential investors confidence the project was being developed by major players in South Africa's economy.

"The agreement provides for the CDC to recognise PetroSA as the official developer and promoter of the proposed refinery, the establishment of a joint project team and a land allocation agreement for the refinery."

Mkhize said the two parties were considering other opportunities in secondary industries towards the establishment of the Coega IDZ as a petrochemical hub serving the whole of Southern Africa.

The refinery would generate close to 27 500 temporary jobs during the construction phase and 18 500 permanent direct, indirect and induced jobs once operational.

CEO of the CDC Pepi Silinga welcomed the agreement, saying the planned refinery would be a major economic boost for the Eastern Cape region and the economy post 2010.

"Most current infrastructural developments in the country are in support of the World Cup Soccer tournament, but the country needs to look beyond that to other major projects for sustained growth and economic development.

"The Coega refinery is a project which will provide economic stimulus, revitalise and redirect the automotive sector and re-skill and up-skill the key artisan employment sector through the CDC's world-class skills development centre to be jointly established by PetroSA and the CDC."

The technical feasibility study for Project Mthombo had been completed and the PetroSA Board would decide by the year end to proceed to its next phase.

The final investment decision was expected during 2011.

- Sapa