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PetroSA And Sinopec Petroleum Sign Agreement
The pact represented a move closer towards Project Mthombo, a potential new crude oil refinery in Port Elizabeth.
"The Framework Agreement enables the two companies to move forward this global-scale crude oil refinery project at Port Elizabeth's Coega Industrial Development Zone (IDC)," the parties said in a joint statement.
The agreement was signed in Pretoria by PetroSA chairman Dr Benny Mokaba and Sinopec chairman Fu Chengyu.
Both parties agreed to integrate the IDC into the next phase of the development.
In May 2012 PetroSA and Sinopec both national oil companies concluded a Joint Study Agreement through which the companies committed to working together to develop the business case for Project Mthombo.
The framework agreement, which is effective immediately, also creates opportunities for co-operation in the areas of oil and gas exploration, and development and production of projects in South Africa and the surrounding countries.
Other areas of co-operation include the investigation of downstream opportunities in the southern African region as well as the development and acquisition of storage and logistical infrastructure.
"The FA was an important building block in making Project Mthombo a reality, and gives PetroSA the opportunity to extend a mutually beneficial relationship with a major national oil company.
"This strategic relationship can and will be leveraged to benefit PetroSA's sustainability and growth programmes," said Mokaba.
Fu said: "South Africa is politically stable and economically developed. Sinopec pays close attention to its business growth in South Africa and wishes to contribute to local economic and social development."
He said Sinopec would push forward the Mthombo project as long as it was economically and technically feasible.
The two companies will also jointly explore other co-operation opportunities in the hydrocarbon industry.
According to PetroSA, once built, Project Mthombo will be the biggest crude refinery in Africa and it will provide national security of supply for South Africa's future fuel requirements.
By 2020 South Africa will have to import about 180,000 barrels per day of gasoline and diesel if there is no significant investment in local refining capacity, PetroSA cautioned.