The refinery will be able to import cleaner fuels after being transformed into a terminal. Frauke Feind from Pixabay.

Engen, a unit of Malaysia’s Petroliam Nasional, is reportedly planning to convert the 120,000-barrel-a-day refinery in South Africa into a terminal in 2023.

The refinery in Durban, which is one of the oldest in the country, has suffered annual losses for much of the past decade.

It will be able to import cleaner fuels after being transformed into a terminal, Bloomberg reported.

In an interview, Engen CEO Yusa Hassan said: “It would be too costly to refit the plant in Durban, which opened in 1954, to meet evolving emissions regulations.”

Hassan added that the operations will continue in the interim and part of the site will be converted into an industrial hub. There are plans to retain jobs at the site.

The oil refinery was operating on oil imports from the Persian Gulf nation, but since US sanctions on Iran, which led to cut in crude oil supplies, the plant was forced to use a blend of other crude grades.

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Conversion of oil refinery into a terminal is also expected to reduce South Africa’s overall emissions.

The refinery has faced opposition as it is located in a residential area.

Companies including Glencore and Royal Dutch Shell are said to have been closely monitoring the move to convert the refinery into a terminal.

Glencore and Royal Dutch Shell hold stakes in other South African processing firms, which have experienced accidents or are under review.

In July, Glencore’s Astron Energy Cape Town plant was closed after an explosion and is expected to come online again in 2022.

Engen’s facility also resumed operations last year but was shut down in December after a fire accident at the facility.

The explosion at the Engen-operated plant in Durban, South Africa injured seven workers at the site.