TotalEnergies SE has agreed to sell subsidiary TotalEnergies Marketing South Africa (Pty) Ltd.’s minority ownership interest in National Petroleum Refiners of South Africa (Pty) Ltd.’s (Natref) 108,000-b/d refinery in Sasolburg, South Africa, to London-based Prax Group.
As part of the Dec. 1 agreement, TotalEnergies will divest its 36.36% stake in Natref—a JV with Sasol Ltd. (63.64%)—to Prax, which intends for the refining JV to serve as a focal point for its expansion into the South African market in line with the operator’s ongoing international growth strategy, TotalEnergies and Prax said in separate releases.
Following close of the proposed transaction—which remains subject to customary approvals, consents, and authorizations—Prax said it plans to improve the Natref refinery’s competitive position through future strategic investment to ensure stability and security of energy supply in South Africa through continuity of operations.
For TotalEnergies, the planned sale comes as part of the company’s strategy to divest its non-core assets and focus on its large integrated fuels and petrochemicals platforms, said Jean-Pierre Sbraire, the company’s chief financial officer.
Despite the proposed divestment, TotalEnergies—which has been present in South Africa for nearly 70 years via production and marketing of fuels, biofuels, natural gas, green gases, renewables, and electricity—said it otherwise remains committed to its remaining operations in the country.
A timeframe for when the deal will be finalized was not revealed.
Ongoing operations
The refinery will continue to operate while the sale progresses through the various regulatory approvals and closing conditions, Natref’s majority shareholder Sasol said in a separate Dec. 1 statement.
Sasol also confirmed it will continue to invest during the pending sale to help the refinery meet South Africa’s more stringent clean-fuels compliance specifications (CF2).
In its latest annual and climate change reports to investors for the year ending June 30, 2023, Sasol said it has undertaken a study to evaluate the potential repurposing of Natref’s manufacturing site into a hybrid refinery equipped to process both crude and biofeedstocks to meet customer demand for low-carbon intensity fuels.
Aligned with its target to meet net-zero emissions across all of its operations by 2050 in line with the global energy transition, Sasol said it originally estimated an initial investment of 9-11 billion rand ($478-584 million) to bring Natref’s refinery into CF2 compliance.
Innovation and technology, however, is enabling the potential hybrid refining solution to result in a reduced cost for Natref to meet CF2 specifications, Sasol said in the 2023 annual report.
