SA picks Gazprombank to revive Mossel Bay refinery

Minister in the Presidency, Khumbudzo Ntshavheni, said South Africa will partner with Gazprombank. Picture: Itumeleng English / Independent Newspapers

Minister in the Presidency, Khumbudzo Ntshavheni, said South Africa will partner with Gazprombank. Picture: Itumeleng English / Independent Newspapers

Published Dec 11, 2023


Minister in the Presidency, Khumbudzo Ntshavheni, has confirmed that Cabinet has backed the deal for PetroSA to partner with Gazprombank to restart the Mossel Bay GTL refinery.

Ntshavheni said this was part of PetroSA’s turnaround plan. She said this would lead to Mossel Bay returning to full production.

However, the final decision will be made in April after a "joint bankable case.”

She said Gazprombank was already in South Africa. Gazprombank will be investing in the Mossel Bay refinery on a risk basis.

But Ntshavheni, who was briefing the media on Monday on the Cabinet special meeting decisions, dismissed claims South Africa could face secondary sanctions from the US for doing business with Gazprombank, which is under US sanctions.

She said South Africa was not the first country to do business with Gazprombank or a Russian company.

“On whether we considered the possibility of secondary sanctions, of course they would have done a risk assessment and what the risks are. We need to explain to South Africans that South Africa is not the first country that will have ties with Gazprombank or the Russian company in terms of oil.

“India has ties with Russia. They procure oil from Russia. EU countries have ties with Russia. Even the US has ties with Russia. There have been exemptions that are considered in terms of the sanctions of the US that are done,” said Ntshavheni.

She said what the Cabinet considered when they looked at the submission made in the meeting was that the investment would yield results for South Africa.

“But what Cabinet has considered as fundamental is the investment that will yield results for this country. But also, that will be beneficial in lowering the price of fuel in the country with out ability to bring back the Mossel Bay GTL refinery,” said Ntshavheni.

She said PetroSA went out on a tender to get the best deal for South Africa.

However, she said Cabinet considered the submission that was made by PetroSA after it had finalised the tender process.

She refused to be drawn on reports that there were 20 bidders for the tender, but 19 companies were not considered and that Gazprombank was the only company that was considered.

Ntshavheni also said they also looked at state-to-state relations as South Africa was a member of the BRICS.

She said South Africa wants to strengthen relations with BRICS member states. However, that does not relegate other relations to other countries.

“If you recall, the South African relationship with the Russian Federation is driven by our partnership in BRICS, and that is not going to change tomorrow. South Africa is not going to withdraw from the BRICS partnership. We are aware there are countries who are not happy with our partnership or our position in BRICS. But as part of the BRICS nations, we have committed to increasing trade and investment relations as part of strengthening that partnership. Our relationship with BRICS partners does not negate our relationship with other countries who are not part of BRICS,” said Ntshavheni.

She said they valued the relationships they have with other countries in building and strengthening relations as well.