SAPREF's clean fuels project exceeds BEE targets

21 December 2004

SAPREF's R700 million cleaner fuels project (called LION) has exceeded its target for Black Economic Empowerment (BEE) procurement, with 78 percent or R125 million of the South African based capital expenditure going to BEE companies. The target for 2004 was 20 percent. With construction now 25 percent complete, SAPREF has been working with local equipment suppliers and on-site contractors to ensure that it fulfills its objective of sourcing some of its requirements locally.

At the same time, SAPREF's focus on providing employment for south Durban residents in the construction of the LION project has resulted in 60 percent of the nearly 550 people employed so far coming from neighbouring communities.

Last week the refinery took delivery of the first piece of equipment to arrive on site when a R1.5 million Penex flare drum manufactured by Metso ND Engineering from Queensburg in Durban arrived on Tuesday (14 December 2004). Another piece of equipment is scheduled for delivery in mid-January from Channel Fabricators, a BEE company in Jacobs, Durban.

On completion, the LION project will see SAPREF providing only unleaded petrol and low sulphur diesel to the country from October 2005, ahead of a government deadline of January 2006. SAPREF has chosen not to replace lead with other octane boosting additives, rather achieving the high octane requirements through further refining of petrol components.

Tjalling Terpstra, the LION project manager, said good progress was being made. "We are very pleased with the project's contribution to BEE, the local economy and the employment of local of people. Construction will take about 18 months in total and activities thus far have entailed mostly civil work. We have made a concerted effort to promote safe working practices and this is bearing fruit. The project has reached the safety milestone of 400 000 work hours without an injury that required medical treatment."

More information on the LION project is available on www.sapref-lion.co.za for those wanting to keep track of its progress

Notes to the Editor
Company profile:
The SAPREF crude oil refinery is a 50/50 joint venture between Shell South Africa Energy and BP Southern Africa. SAPREF is southern Africa's largest crude oil refinery, with 35 percent of the country's refining capacity. This equates to 180 000 barrels of crude oil per day or 8.5 million tons per year. SAPREF's facilities comprise a single buoy mooring through which 80 percent of South Africa's crude oil is imported, a storage facility at the Durban harbour, joint bunkering services and the refinery itself, which is located in Prospecton. The refinery has been operating since 1963. More than R480 million has been invested in environmental improvements since 1993, including a R350 million project commissioned in 2002 to reduce sulphur dioxide emissions from the refinery by 46 percent.

Tjalling Terpstra, SAPREF's LION project manager, (left) was on hand to receive the first piece of equipment to be delivered on site for the refinery's cleaner fuels project. With him are Mark Ackerman, Metso ND Engineering's technical director and Elvis Green, Metso's production director.

For more information contact:
Phumi Nhlapo
SAPREF Communications Officer
Tel: 031-480 1303
Fax: 031-468 1111
Cell: 082 885 7938
email: nhlapop@sapref.com