Prax Group has struck a deal with TotalEnergies to buy a stake in the Natref refinery, in South Africa.
The companies did not reveal the agreed price for the 36.36% stake in the facility. Sasol has the remaining 63.64% in the Free State facility, which has capacity of 108,500 barrels per day of oil.
Prax said this purchase would see it enter the South African market. Natref will “serve as a focal point for its expansion into Africa”, the company said. It plans to make further investments in the asset and establish it as a regional hub.
“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,” said Prax CEO and chairman Sanjeev Kumar Soosaipillai.
“The acquisition marks another significant milestone for the Prax Group, and will create unique opportunities across the South African supply chain, meeting the needs of customers and communities for years to come.”
The sale is subject to various approvals and consents.
Total said the sale was in line with its plan to sell off non-core assets. Natref serves South Africa’s Johannesburg area. It receives oil via a 600 km pipeline from Durban.
“The transaction is in line with the Company strategy to focus on its large integrated fuels & petrochemicals platforms and to divest its non-core assets,” said Jean-Pierre Sbraire, CFO of Total.
Total owns a 50.1% stake in TotalEnergies Marketing South Africa. The other 49.9% is owned by South African shareholders.
Natref started up in 1971. The facility is South Africa’s only inland refinery and processes heavy crude.
Prax has interests in the upstream but also in the downstream. In the UK, it operates the Lindsey facility, which has capacity of 113,000 bpd.
In September, the company closed a $300 million term loan facility, with backing from HSBC, Chimera Abu Dhabi and Orchard Global Asset Management.