Minister in the Presidency Khumbudzo Ntshavheni has defended the move, saying it would lower the price of fuel and was based on South Africa’s partnership with BRICS nations to increase trade and investment between them.

Cabinet has given the green light for PetroSA to partner with Russia’s third-largest bank, Gazprombank, to restart its gas-to-liquids refinery in Mossel Bay.

The bank is one of those under sanctions over Russia’s war in Ukraine.

But Minister in the Presidency Khumbudzo Ntshavheni has defended the move.

She said it would lower the price of fuel and was based on South Africa’s partnership with BRICS nations to increase trade and investment between them.

These include the countries of Brazil, Russia, India and China.

Minister in the Presidency Khumbudzo Ntshavheni said that Cabinet was not privy to information that PetroSA reportedly ruled out 19 out of 20 bidders for the R3.7 billion project, leaving Gazprombank as the preferred investment partner.

Following an update on restarting the refinery at a special Cabinet meeting on Friday, Cabinet has given Gazprombank the thumbs up to enter into a risk-and-reward partnership with PetroSA.

Ntshavheni said that government would not be making an equity injection.

"Cabinet noted the selection of Gazprombank is still dependent on the final investment decision that will be informed by a joint bankable business case as well as the terms and conditions which are expected to be finalised in April 2024."

Ntshavheni said that Cabinet weighed up the risk of secondary sanctions on South Africa.

"The South African relationship with the Russian Federation is driven by our partnership in BRICS. And that’s not going to change tomorrow. South Africa is not going to withdraw from the BRICS partnership."

She pointed out that the EU, US and India also had oil partnerships with Russia.

Restarting the refinery is set to retain at least 2,000 jobs and create 4,000 more.

EWN