South Africa targets 650,000 bpd refinery

Keypoints:

CEF targets up to 650,000 bpd
Imports supply about 61 percent of demand
Financing and timetable remain unresolved

SOUTH Africa is targeting refining capacity of up to 650,000 barrels per day at the former SAPREF site in Durban as the government moves to reverse a steep decline in domestic fuel production and reduce growing dependence on imports.

The proposal goes far beyond bringing an old refinery back online. Pretoria wants to rebuild a strategic part of South Africa’s industrial base at a time when imported petrol, diesel and other petroleum products account for an increasing share of domestic consumption. But financing and a firm construction timetable remain unresolved.

Three-stage refinery revival

The state-owned Central Energy Fund has outlined a three-stage redevelopment strategy beginning with the use of existing storage tanks and transfer infrastructure to handle imported finished petroleum products.

The first phase is intended to generate revenue from infrastructure already available at the sprawling Durban site while preparations for rebuilding refining capacity advance.

Under the second phase, CEF is targeting crude-processing capacity of about 400,000 bpd. A longer-term third phase envisages capacity rising to between 400,000 and 650,000 bpd, subject to investment, regulatory approvals and other project milestones.

No firm deadline has been announced for completing the programme.

South Africa’s urgency is being driven by a dramatic reversal in its fuel-supply position. CEF says domestic refineries provided about 78 percent of petroleum-product demand in 2019. That share has since fallen to around 39 percent, leaving imports to account for approximately 61 percent.

The change mirrors a wider reshaping of Africa’s downstream petroleum trade. Africa Briefing has previously reported how rising Dangote Refinery output helped push South Africa ahead of Nigeria as Africa’s biggest refined-fuel importer.

R1 deal put state in control

CEF acquired the SAPREF refinery precinct from BP and Shell for a nominal R1, effective December 1, 2024, according to the group’s audited financial statements.

The accounts recorded a provisional R1.8bn (about $112m) bargain-purchase gain from the transaction, which transferred refinery land, processing units, tanks, pipelines and associated infrastructure to the state-owned group.

Shell and BP had already halted refining operations in early 2022 while considering the facility’s future. Severe floods in KwaZulu-Natal in April that year subsequently damaged the site.

SAPREF had nameplate processing capacity of about 180,000 bpd, making the proposed expansion to as much as 650,000 bpd a fundamental redevelopment rather than simply a restart of the former refinery.

$15bn estimate predates roadmap

The 650,000-bpd ambition itself is not entirely new.

South Africa’s 2025 Investment Project Book outlined proposals for a larger refinery at SAPREF with anticipated capacity of about 650,000 bpd and an estimated investment value of $15bn. The government document said technical and financial partners would be required.

That estimate predates CEF’s latest three-phase roadmap and has not been confirmed as the final cost of the current redevelopment programme.

At its upper end, the proposed refinery would put Durban in the same broad capacity class as Nigeria’s Dangote Refinery, whose emergence is already changing petroleum-product flows across Africa.

Africa Briefing has also reported on plans for a Namibian fuel-distribution hub linked to Dangote supply and an East African refinery project aimed at reducing dependence on imported fuel.

Energy security drives push

The refinery strategy fits into a wider government effort to strengthen South Africa’s resilience against disruptions in global petroleum markets.

Cabinet approved publication of a draft Strategic Petroleum Stocks Policy in July 2026 after a government-commissioned study identified both stronger stockholding arrangements and increased domestic refining capacity as priorities.

The proposed framework initially calls for the South African National Petroleum Company to maintain strategic crude and refined-product reserves equivalent to 60 days of net imports, rising progressively to 90 days over the longer term.

For Pretoria, restoring substantial refining capacity would therefore serve both industrial and national energy-security objectives.

But the decisive question remains financing.

CEF has yet to announce a final funding structure, confirmed project cost, final investment decision or implementation timetable for the refinery redevelopment.

Until those are secured, 650,000 bpd remains a long-term target rather than committed refining capacity.

If the investment follows, however, SAPREF could move from symbolising the decline of South Africa’s refining industry to becoming one of the largest downstream petroleum projects on the continent.