The Mossgas liquid fuels-from-gas plant in Mossel Bay has been shuttered since 2020 after its offshore gas supplies ran out. A potential tender award for Russia’s Gazprombank to help restart the plant is being contested in the Western Cape High Court by a rival bidder. Picture: supplied
The fate of PetroSA’s controversial tender award to Russia-based Gazprombank, potentially worth more than R20 billion, to help restart the Mossel Bay gas-to-liquids refinery, hangs in the balance after a rival bidder filed a High Court case requesting that the award be set aside.
BR had last week requested PetroSA for an update on the progress of this project because the transaction was controversial owing to the possibility of sanctions risk at the time of the tender award in November 2023. In November last year, the US said that Gazprombank had become a sanctioned company. These sanctions extend to other Western countries such as Australia and Canada.
However, a PetroSA spokesperson said: “The processes for the awarding of RFP0001/2023 to Gazprombank South Africa are currently before a court of law for consideration. Therefore, taking into account the legal proceedings underway, PetroSA will not be providing any commentary regarding RFP0001/2023.”
Last September, one of 19 bidders for the tender, Phezulu Natural Energy Resources, asked the Western Cape High Court to set aside the tender award to Gazprombank South Africa, and South African businessman Lawrence Mulaudzi, through his company Equator Holdings.
According to the International Bar Association’s Legabrief Africa online publication, Phezulu had claimed that the tender was allegedly split illegally to benefit certain parties, that there was a lack of transparency in the tender award, and that the work awarded to Equator Holdings strayed far outside original tender specifications. The elimination of the other 19 bidders on technical grounds had also suggested questions relating to the fairness of the selection process.
The project had included refurbishing the FA offshore platform, which connects offshore gas to pipelines that bring it onshore. The refinery has closed since 2020 due to a lack of feedstock, as the offshore gas fields ran out of gas. The refinery had expected to produce some 46 000 barrels of fuel per day.
According to Legalbrief, the deal had already faced other challenges last year, including Gazprombank's failure to deliver a promised $200 million (R3.7bn) in funding. Legalbrief said also: “Leaked records show Equator had been one of the 20 bidders for RFP 0001/2023, but that it had scored 0 points out of 100 and was eliminated because the ‘authenticity of the entity could not be established’.”
Mulaudzi has previously been linked to other government-related projects, and he featured in the Mpati Commission's investigation into corruption at the Public Investment Corporation (PIC). According to the website of the Open Secrets non-profit organisation, in 2019, Mulaudzi was “entangled with key decision-makers at the PIC” and had received funding for various deals from the PIC as a result of these relationships.
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