Project Ikhwezi gets go-ahead to feed PetroSA’s GTL refinery

Dineo Faku

PetroSA had received regulatory approval from the National Energy Regulator of SA (Nersa) for its $1 billion (R8bn) Project Ikhwezi, the state-owned company said yesterday.

The green light from Nersa will allow the Ikhwezi project to produce natural gas feedstock from PetroSA’s offshore F-O development field off the south coast once the project is commissioned.

PetroSA group chief executive Nosizwe Nokwe-Macamo said yesterday that the project was one of the most important in the company’s future.

“Project Ikhwezi creates a critical opportunity for sustaining the operations of our gas-to-liquids (GTL) refinery. It ensures that we continue to play a vital role in the (local) petrochemicals market. Most importantly, PetroSA will continue to be a source of much-needed employment in the southern Cape,” she said.

PetroSA said the drilling for five of Project Ikhwezi’s wells was on track to start in November and should be completed in the second quarter of 2013, while first gas production was expected in mid-2013.

“It will take around six months to complete each of the five wells. The drilling activity accounts for 63 percent of the project’s total capital expenditure,” the company said.

Project Ikhwezi was started in 2009 when PetroSA drilled eight wells, two of which were F-O appraisal wells. After detailed studies, PetroSA’s exploration and production specialists earmarked five wells in the F-O field for development.

The company made the application to Nersa in December for Project Ikhwezi, which is aimed at maintaining the life of the company’s Mossel Bay GTL refinery. The refinery has a capacity of 36 000 barrels a day and employs 1 500 people.

Previously PetroSA signed a number of memorandums of agreement with foreign owned firms to source feedstock for its Mossel Bay GTL project, which is running out of supplies.

Johan Muller, the team leader for energy and power at Frost & Sullivan Africa, said yesterday in terms of growth strategy, Project Ikhwezi was a step towards PetroSA’s plan to build a 400 000 barrels a day oil refinery at Coega.

“This project is a step in the direction of PetroSA in the future competing with international oil companies, by following commercial objectives while still adhering to developmental aims,” he said.