Sasol declares pressure majeure as stalled oil shipments shut down Natref

  • Sasol has declared a power majeure on petroleum merchandise thanks to the hold off of crude oil shipments. 
  • This resulted in the shutdown of the Natref refinery. 
  • Sasol said measures were staying taken to stabilise supplies from Natref and the predicament would hopefully be resolved by thirty day period finish. 
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Sasol has declared a power majeure on the offer of petroleum goods following crucial refinery Natref was compelled to shut down on Friday due to delays in the arrival of crude oil shipments.

Sasol mentioned shipments had been expected to start arriving on Saturday 16 July, which would see crude oil feed starting to be restored to Natref.

The aim is to see Natref operating at full potential by thirty day period conclude. 

Power majeure is a mechanism that frees parties from contractual obligations in the situation of an amazing function that helps prevent them from accomplishing as normal. 

“Sasol Oil has declared a Pressure Majeure on petroleum goods as a outcome of delays in the arrival of crude oil shipments which are further than Sasol Oil’s control. These delays have impacted availability of crude oil feedstock for processing at Natref, which necessitates the shutdown of its Natref refinery,” a Sasol spokesperson explained to Fin24 on Saturday. 

“In the instances, Sasol Oil will not be in a placement to fully satisfy its commitments on the source of all petroleum products and solutions from July 2022.”

The scenario would ideally be fixed quickly, the spokesperson added. 

“Sasol Oil is participating business position players as nicely as impacted clients regarding the merchandise shortfalls and will communicate on an ongoing foundation on measures taken to stabilise offer from Natref refinery.”

Crude oil that is destined for Natref is offloaded in Durban port, the place it is first stored and then pumped all over 600km to the refinery. The firm did not right away validate what experienced induced the hold off. But it is not the 1st time Sasol has experienced to declare a pressure majeure in the latest months because of to source chain hassles impacting its routes. In April, it declared a power majeure relating to the export of some chemical products due to significant rainfall and floods in KwaZulu-Natal, Fin24 previously reported.

At the time, it stated generation costs at some of its crops in Sasolburg experienced been impacted due to problems to the Sasolburg-Durban railway infrastructure. 

The Natref refinery – which was commissioned in 1971 – has been through a selection of upgrades for the duration of its lifespan, which includes an expansion venture to raise its capacity by around 25% to some 108 000 barrels for every working day. It is a joint enterprise involving Sasol mining and TotalEnergies.

The two businesses have warned that it could become unsustainable due to cleanse gas regulations, which they have explained could make functions unviable in the future.

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But the news of Natref’s provide headache arrives amid increasing considerations around the state of South Africa’s refineries. Electricity marketing consultant Citac not long ago warned that amid soaring fuel costs, the country’s petroleum imports could triple by 2023 as opposed to pre-pandemic stages, as raising figures of domestic refineries are compelled to shut their doors. South Africa wants some 25 billion litres of gasoline a yr and by now satisfies more than 50 % that demand from customers as a result of imports. 

Natref’s shutdown on Friday follows hot on the heels of a number of refineries in SA that have experienced to suspend functions possibly briefly, indefinitely, or completely.

In February, BP and Shell introduced they would be halting operations indefinitely at Sapref – Southern Africa’s most significant crude oil refinery, which can approach some 180 000 barrels a day and accounts for 35% of SA’s refining capacity. By March, Mineral Means and Power Minister Gwede Mantashe confirmed that governing administration, as a result of the Central Energy Fund, was taking into consideration acquiring Sapref in a bid to preserve it.

Meanwhile Astron Energy’s Cape City facility, which had a 100 000 barrel-a-day capability, shut its doorways in 2020 right after a devastating explosion that cost two lives. Similarly, Engen’s Durban refinery, which experienced a potential of 120 000 barrels a day, has also remained closed given that an explosion in late 2020.