Saudi Arabia in talks to build refinery, petrochemicals plant in South Africa

Saudi Arabia’s Energy Minister Khalid Al-Falih speaks during a news conference in Riyadh, Saudi Arabia January 9, 2019. (File Photo/Reuters)
Updated 18 January 2019
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Saudi Arabia in talks to build refinery, petrochemicals plant in South Africa

  • Saudi Arabia is in talks to build an oil refinery and a petrochemicals plant in South Africa as part of $10 billion of investments in the country
  • Saudi oil would be used in the planned refinery whose construction would be led by Saudi Aramco

PRETORIA: Saudi Arabia plans to build an oil refinery and petrochemicals plant in South Africa as part of $10 billion of investments in the country, Saudi Energy Minister Khalid Al-Falih said on Friday after talks with his South African counterpart.
The announcement is a much-needed vote of confidence in Africa’s most industrialized economy, where President Cyril Ramaphosa is trying to attract $100 billion of new investments to rekindle growth.
The new refinery would reduce the need for refined product imports and cement Saudi Arabia’s dominant position in South Africa’s oil sector. The Kingdom already supplies 40 percent of the crude oil consumed in South Africa.
“Saudi Aramco and South Africa’s Central Energy Fund are moving forward with the feasibility study and identifying the parameters of the project,” Falih told reporters in Pretoria, South Africa’s administrative capital.
South African Energy Minister Jeff Radebe said a location for the refinery and petrochemicals plant would be finalized in the coming weeks. The capacity for the refinery is yet to be determined.
South Africa has talked about building an extra refinery for a decade, but it has struggled to agree commercial terms with investors.
It has six refineries, four using crude oil and two synthetic fuel as feedstock. Royal Dutch Shell, BP , Total and Sasol are among major refinery operators.
Al-Falih said Saudi Arabia had held discussions with Ramaphosa’s predecessor, Jacob Zuma, about building a refinery in South Africa but the proposed location was not attractive.
The two governments are now considering Richard’s Bay in KwaZulu-Natal province, home to South Africa’s major coal export terminal, among potential locations for the refinery.
State oil giant Saudi Aramco is also studying whether to use South African oil storage facilities in Saldanha Bay, while Saudi power firm Acwa Power is looking at investing in South Africa’s revamped renewable energy program.
Al-Falih confirmed there were discussions about the kingdom investing in South African state defense company Denel, as exclusively reported by Reuters in November.


IDEX 2019: UAE signs $1.6 million new defense deals

Updated 2 min 28 sec ago
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IDEX 2019: UAE signs $1.6 million new defense deals

  • Falcon was developed in response to the UAE’s request to replace the Hawk Air Defense System

ABU DHABI: The UAE armed forces has signed $1.17 million worth of defense contracts with local companies and $514.8 million with international companies, a military spokesperson said on Tuesday.

The Emirates on Monday also awarded Raytheon a $1.55 billion contract to supply its air force with platform systems to launch missiles.

The agreement was signed at the week-long IDEX military exhibition in Abu Dhabi and followed the award on Sunday of a 1.3 billion-dirham contract to Raytheon to supply the UAE with patriot missiles.

The UAE armed forces signed a total of 7.2 billion dirhams in contracts on Monday, including 5.8 billion dirhams with international companies, Brig. Gen. Mohammed Al-Hassani said, speaking through a translator.

The UAE has signed a total of 12 billion dirhams in contracts since the IDEX exhibition started on Sunday, he said.

Lockheed Martin, Germany’s Diehl Defense, and Sweden’s Saab on Monday launched at IDEX the Falcon air defense weapon system, billed as a replacement to the Hawk system used by countries in the Middle East.

Falcon was developed in response to a UAE request for a replacement for the Hawk system and talks are underway to sell it to the Gulf state, Scott Arnold, Lockheed Martin’s vice president and deputy head of Integrated Air and Missile Defense said.

Weapons sales to the UAE have come under scrutiny over the past year due to the country’s involvement in the Yemen war that has killed tens of thousands of people and pushed the country to the brink of starvation.

The UAE and Saudi Arabia are leading a military coalition, which includes local forces drawn from Yemeni factions, that is trying to restore the internationally recognized government ousted from power in 2014 by the Iran-aligned Houthi movement.