South Africa Plans $8B SAPREF, Mossel Bay Refinery Revival

South Africa is considering more than $8 billion of investment to revive two mothballed state-owned fuel facilities, including a major redevelopment of SAPREF in Durban, as the country seeks to rebuild domestic refining capacity and reduce its growing reliance on imported petroleum products.

By Carolina Curiel
Published September 24, 2026

MONTREAL (Oil Monster): South Africa could require more than $8 billion to revive the mothballed SAPREF and Mossel Bay refining facilities as the government seeks to strengthen domestic fuel security and reduce its dependence on imported petroleum products.

The plans were outlined by officials as the Central Energy Fund, or CEF, advances a multi-stage strategy for the former SAPREF refinery in Durban while evaluating a phased restart of PetroSA’s Mossel Bay gas-to-liquids facility.

SAPREF Could Expand to as Much as 650,000 Bpd

CEF acquired the assets comprising the flood-damaged SAPREF refinery precinct from BP Southern Africa and Shell Downstream South Africa in 2024 for a nominal consideration of one rand.

The transaction included land, tanks, process units, pipelines linking SAPREF with the Island View terminal and the single buoy mooring used for crude imports.

The government is now considering a much larger refining operation at the site.

CEF’s latest redevelopment plan targets throughput of approximately 400,000 barrels per day in an initial refining phase, with a longer-term objective of between 400,000 and 650,000 barrels per day.

SAPREF’s former nameplate capacity was approximately 180,000 barrels per day.

CEF Estimates SAPREF Investment at About $7.15 Billion

CEF’s latest estimate puts the SAPREF refinery investment at approximately $7.15 billion.

The group has not publicly detailed a completed financing package for the redevelopment.

Reuters reported that a banking source and a government source said potential financing involving the African Export-Import Bank, or Afreximbank, was among the options being discussed.

A final investment decision is targeted for the 2027/28 period, subject to National Treasury approval and other project requirements.

The project therefore remains at the planning and financing stage rather than being a fully committed refinery construction program.

Existing SAPREF Assets Could Generate Revenue First

Before a full refinery redevelopment, CEF plans to use existing SAPREF infrastructure to generate revenue.

The initial phase includes restoring liquefied petroleum gas import and distribution activities and leasing available storage tanks.

CEF has said using the existing tanks and transfer infrastructure could improve asset utilization and create a path toward commercial sustainability while the larger refinery investment case progresses.

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Mossel Bay Refinery Restart Planned in Two Phases

CEF is also considering the restart of the Mossel Bay gas-to-liquids refinery, which has been idle since 2020 after declining domestic gas supplies left the facility without sufficient feedstock.

The refinery is operated by PetroSA and is now part of the South African National Petroleum Company structure.

The proposed first phase would restore production of approximately 18,000 barrels per day at an estimated investment of 5.8 billion rand.

Using the exchange rate cited in the source reporting, that equates to approximately $358 million.

A second phase would increase production to approximately 46,000 barrels per day and require an additional 8.5 billion rand, or approximately $525 million.

Together, the two Mossel Bay phases represent investment of about 14.3 billion rand, equivalent to approximately $884 million at the cited exchange rate.

Combined Refinery Plan Tops $8 Billion

Adding CEF’s latest $7.15 billion SAPREF estimate to the approximately $884 million planned across the two Mossel Bay phases produces a combined investment of roughly $8.03 billion.

The figures remain project estimates rather than committed capital expenditure.

The ultimate cost will depend on final project scope, financing, engineering work, regulatory approvals and the development path selected for each facility.

Fuel Imports Now Supply More Than 60% of South Africa’s Market

The refinery strategy comes after years of declining domestic processing capacity.

Recent CEF reporting indicates that imported finished petroleum products now account for more than 60% of South Africa’s supply following the shutdown of several domestic refineries.

South African parliamentary reviews have repeatedly identified declining refining capacity and growing import dependence as risks to national fuel security.

The Port of Durban and its Island View petroleum-storage complex have become particularly important because a large share of imported fuel enters the country through the facility.

SAPREF Revival Would Be Much Larger Than the Old Refinery

The proposed SAPREF redevelopment would represent more than a restoration of the plant damaged during the 2022 KwaZulu-Natal floods.

A 400,000-bpd refinery would have more than twice the processing capacity of the former 180,000-bpd operation.

At the upper 650,000-bpd target, the redeveloped facility would have approximately 3.6 times the old refinery’s nameplate capacity.

CEF has said the redevelopment must be commercially disciplined, technically credible and financially sustainable.

Mossel Bay Still Faces a Feedstock Challenge

Capital is not the only issue surrounding the Mossel Bay restart.

The facility stopped operating after domestic gas supplies declined, and earlier PetroSA planning documents identified securing alternative gas, condensate or other suitable feedstock as necessary for restarting operations.

The latest refinery announcement does not identify a finalized long-term feedstock agreement for the full Mossel Bay restart.

That means the economics of securing reliable feedstock will remain an important part of the project’s commercial case.

Clean-Fuel Requirements Add Another Investment Consideration

South Africa is also moving toward tighter Clean Fuels 2 specifications, scheduled to take effect from July 1, 2027.

The new fuel standards impose stricter requirements on sulphur, benzene and other product specifications, meaning future domestic refining capacity must be designed or upgraded to produce compliant fuels.

What Happens Next

The immediate SAPREF strategy focuses on generating revenue from existing storage, LPG and logistics assets while CEF develops the larger refinery investment case.

The major milestones will be the financing structure, National Treasury approval, final investment decision and confirmation of the refinery configuration and capacity.

At Mossel Bay, the key issues include capital availability and securing commercially viable feedstock for a sustained restart.

If both programs advance, they would represent one of South Africa’s largest efforts in decades to rebuild domestic liquid-fuel production capacity.

Courtesy: www.reuters.com