National oil company PetroSA is planning a new crude oil refinery at Coega, near Port Elizabeth, it said.
"Dubbed Project Mthombo, the proposed crude oil refinery is expected to produce about 250,000 barrels of fuel a day, and will come on stream in 2014-2015," the company said.
It would be one of the biggest post-2010 investments in South Africa.
PetroSA said its plans to build the refinery had been "ratcheted up" following official confirmation on Monday from the Coega Development Corporation that it had been granted preferred investor status.
Design of the refinery was well-advanced, and the company was "in discussion with several local and international parties who have expressed interest in possible financial and operating partnerships", PetroSA chief executive Sipho Mkhize said in a statement.
It was estimated the project would generate about 5,000 direct jobs during operations, and 20,000 indirect jobs.
This project will also significantly improve South Africa's fuels import bill," he said, Coega had been chosen as the site for the proposed new refinery after a thorough and independent screening of five potential locations around South Africa.
Once the technical specifications and commercial aspects of the project had been clarified, the final investment decision would be made "around 2010", he said.