PetroSA oil rig.

 Johannesburg - PetroSA is considering a new oil refinery in Port Elizabeth to meet the country's increasing energy demands, the parastatal said on Thursday.

“We were not making the announcement today. What happened today is that we went to Parliament and we presented in Parliament our corporate plans until the year 2017,” said PetroSA spokesman Thabo Mabaso.

“Among the initiatives we are going to be embarking on is the looking of a possibility of establishing a crude oil refinery in Port Elizabeth,” he said.

“We are still in the very initial stages. We are now conducting a feasibility study...this could take up to two years.”

In May 2012, PetroSA signed a joint study agreement with China's state-owned energy and chemical conglomerate Sinopec Group.

The agreement defined the process by which PetroSA and Sinopec would shape the business case for Project Mthombo, the initiative to construct a world-class crude oil refinery at Port Elizabeth’s Coega Industrial Development Zone.

It involved the commissioning of studies over two phases.

The first phase would focus on market studies, the review and selection of a business case.

The second phase would develop a business case that was expected to prepare Project Mthombo for the important Front End Engineering Design (FEED) stage.

FEED refers to the basic engineering which is conducted after the completion of a conceptual design or feasibility study of a project.

The joint study agreement has made it possible for PetroSA and Sinopec to contract Sinopec Engineering Incorporation (SEI) to conduct the studies on behalf of the two companies.

Commissioning of the Coega refinery was scheduled for the period between 2018 and 2020. - Sapa