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Monday, June 10, 2013
The South African government’s Clean Fuels 2 (CF2) specifications could cost Sasol and estimated R11.7-billion to comply with. The company will need to convert its Natref refinery, a JV with Total, and its Sasol Synfuels in Secunda.
The specifications, which were published in the Government Gazette in June 2012, are aligned with Euro V emission standards and will be introduced starting July 2017.
The South African Petroleum Industry Association has estimated that an investment of R40-billion will be required for South Africa’s refineries to comply with the CF2 specifications.
In a shareholder update Sasol CFO Christine Ramon said the capital expenditure would be required to comply with the core specifications, octane and volume recovery. She added that the estimates were subject to change, based on the finalization of feasibility studies.
Ramon said that Sasol was encouraged by Finance Minister Pravin Gordhan’s February budget announcement, indicating that support mechanisms would be introduced to assist the local refineries with the introduction of environmentally friendly fuels.
Details of these mechanisms are expected by the end of June.
“We continue to engage with the National Treasury and the Department of Energy on cost-recovery mechanisms and specifications to be prepared and published by the South African Bureau of Standards,” Ramon said.
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