UK energy company to get stake in Sasol’s Natref
A UK-based company will acquire a 36% stake in the Natref oil refinery, which is owned by Sasol and TotalEnergies.
The Prax Group, a British multinational conglomerate dealing in oil refining, storage, distribution and sales of crude oil, petroleum products and biofuels, announced on Friday it has signed a sales and purchase agreement for just more than a third of a share in the company.
The transaction is subject to customary approvals, consents and authorisations.
The transaction is for TotalEnergies’ full 36.36% share in Natref. It is in line with its strategy to divest noncore assets, TotalEnergies said.
Located in Sasolburg in the Free State, the Natref refinery has a capacity of 108,500 barrels of oil per day and supplies the main SA inland market of Johannesburg and surrounding areas.
“The signing of this agreement is the first step towards our entry into Africa. This will provide us a solid platform from which to execute our future growth strategy,” Prax Group CEO Sanjeev Kumar Soosaipillai said.
FOCAL POINT
The group’s intention is for Natref Refinery to serve as a focal point for its expansion into Africa with further investment and a regional hub built around this key asset in SA.
The company said it plans to improve the refinery’s competitive position “through future strategic investment”.
Sasol said on Friday that its subsidiary Sasol Oil, through which it owns a majority stake in Natref, has been formally notified by TotalEnergies that it has signed a sales and purchase agreement with Prax Group.
“Natref will continue to operate as is while the transaction progresses through the various regulatory approvals and closing conditions,” Sasol said.
Local refineries have been marked by several closures including the shut-down of Petro SA’s Mossel Bay refinery due to the unavailability of gas feedstock.
FREEZE
In 2022 BP and Shell announced an indefinite freeze of operations at their Sapref refinery in Durban that accounted for 35% of SA’s oil refining capacity.
Refineries have been under pressure to comply with rules published by the government in 2021 that lower the sulphur content allowed in diesel. To comply, some would have to upgrade their facilities at costs that might run into billions.
Sasol said in its 2023 integrated report that upgrades of R9bn-R11bn may be required to comply with the legislation.
However, to comply with the new regulations, the company said it was considering investing to convert the refinery to a hybrid (crude and biofuels) green facility.
E-FUEL SOLUTION
“This provides an e-fuel solution for the country and will aid in reducing emissions while complying with tighter clean fuel specifications,” Sasol said.
“The initial investment was estimated to be R9bn to R11bn to meet the [clean fuel] compliance requirements, however, through innovation and technology, we are advancing with a low-carbon solution,” the company said.
Sasol on Friday also said it has completed a prefeasibility study into the Boegoebaai green hydrogen and ammonia export project. The group said the study confirmed that the project has the potential to be technically and economically viable.
“Sasol recognises and embraces its responsibility as a leader of the energy transition in SA, including building the new
industrial frontier that green hydrogen represents.
“A partnership construct, in pursuing this ambition, is critical in our disciplined capital allocation approach to manage the inherent risk of such an earlystage development,” Priscillah Mabelane, executive vice-president for the energy business at Sasol, said.
The oil and energy major has appointed Mizuho International as financial adviser to search for offshore partners to co-invest and to complete further studies on the project, which was gazetted as one of the government’s strategic integrated projects in December 2022.
THE SIGNING OF THIS AGREEMENT IS THE FIRST STEP TOWARDS OUR ENTRY INTO AFRICA