Page 5 - AfrOil Week 25 2021

AfrOil COMMENTARY AfrOil

Sonangol announced in 2019 that it had received and operate the refinery, a tank farm and marine
68 offers in a tender for the right to build the terminal for receiving feedstock and export-
refinery, but thus far it has not named any win- ing products, and all associated infrastructure
ners in the bidding process. The cost of the including power generation. With Quanten at
scheme has been estimated at around $8bn. first glance appearing to have little in the way of
Sonaref, the state oil firm’s refining arm, has said relevant experience, the award looks to be yet
it expects the Lobito plant to be finished by 2025. another ambitious refining project award to a
A 1.5-square km site has been allocated just company that will struggle to bring it to fruition.
north of Lobito. As previously conceived, the However, the consortium notes that its “team
refinery would be built in two phases – the first members, affiliates, subcontractors and advo-
comprising low-conversion units aimed at satis- cates may include (subject to negotiations and
fying local demand, and the second upgrading contracts)”: KBR, McDermott, Cisco, Berklee
the plant’s complexity to produce higher-quality University’s Renewable and Appropriate Energy
fuels suitable for export. Laboratory (RAEL), the US government’s
A deal was signed in 2007 with Chinese Department of Commerce, Department of State
refining giant Sinopec to develop and fund the and its Prosper Africa initiative.
scheme, while a front-end engineering and Indeed, US government support was
design (FEED) study on the Lobito plant was expressed by the Ambassador to Angola Nina
completed by KBR in 2010. Maria Fite, who wrote on Twitter: “A strong
In 2011, the oil ministry said that Lobito #USAngola commercial relationship is good
would process around 120,000 bpd during its for the US and Angola. Congrats to the US con-
first stage of operation. Meanwhile, Engineers sortium of companies led by Quanten LLC on
India Ltd was awarded a contract for FEED winning the $3.5bn public tender to build an
validation and review of basic engineering and oil refinery in Soyo! $2.5bn in US exports sup-
design in mid-2015. ports US jobs.” With so much US export credit
BP, Eni and Total have all previously held involved, the consortium is better placed than
talks with Luanda about possible investment, those involved in abortive efforts to ramp up
and the Italian firm agreed in late 2015 to review Angola’s downstream capabilities.
the plans. Sonaref, the
Cabinda construction refining arm of
Soyo progress Meanwhile, Gemcorp handed out a construc-
During the first quarter of this year, Angola’s tion contract to Odebrecht Engenharia e Con- Sonangol, has
Ministry of Mineral Resources and Petroleum strução (OEC) to build a crude distillation unit
(MIREMPET) awarded a $3.5bn build, own (CDU) as part of the project to develop a 60,000 said it expects
and operate (BOO) contract for the construc- bpd refinery in the Cabinda exclave.
tion of a 100,000 bpd facility at Soyo in northern The UK-based company holds a 90% stake the Lobito
Zaire Province to a consortium led by Califor- in the $920mn project alongside state-owned refinery to be
nia-based electrical contractor Quanten. Sonangol Refining (Sonaref). Gemcorp took a
According to Quanten, the facility will pro- final investment decision (FID) on the project finished by 2025
duce “consumer-ready end products such as last October, saying that the partners intend to
gasoline, diesel, jet fuel and asphalt, and is pro- build the facility in stages. The first stage will
tected from adverse geopolitical events” and will involve the construction of a crude distillation
also employ stringent pollution and sulphur unit (CDU) with a capacity of 30,000 bpd, as well
content requirements when it comes into oper- as storage tanks that can hold up to 1.2mn bar-
ation in 2024. rels of oil, while the second and third stages will
The winning consortium is comprised of US involve doubling the plant’s capacity and adding
firms Quanten, TGT and Aurum & Sharp and secondary processing facilities.
local technical services firm ATIS Nebest-An- The refinery will be built on the Malembo
gola. The group came out on top, following a Plain, around 30 km north of the provincial cap-
tender process that was launched in October ital, and is expected to produce gasoline, diesel,
2019. Between September and December 2020, fuel oil and Jet A1.
due diligence was carried out by PwC on eight According to Gemcorp, the first phase
bidders, with five consortia going through to will cost around $220mn, with the remaining
the final round. China’s Jiangsu Sinochem Con- $700mn of the budgeted amount split across
struction Co. was disqualified for presenting phases two and three. The company previously
insufficient documentation. said it anticipated operations commencing
Quanten was joined in the last round by early next year, though this timeline appears
China National Machinery & Equipment ambitious.
Import & Export Corporation (CMEC), Gem- The progress on each of these facilities is
corp Capital (UK), Tobaka Investment Group encouraging for Angola, which is seeking to
(South Africa), SDRC (China), Satarem (Swit- improve revenues by adding value through the
zerland) and CHC, and won with a final score refining process, while recent efforts to engage
of 31.5. The CMEC Consortium finished sec- IOCs are designed to halt and potentially reverse
ond with 30.9, followed by Gemcorp with 29.9, decline in the upstream. If realised the refineries
which won the contract for the Cabinda refinery. will increase throughput capacity nearly 10-fold,
Little-known Quanten’s website outlines the though expectations should be tempered given
consortium’s plans to design, construct, own the long delays experienced to date. ™

Week 25 23•June•2021 www. NEWSBASE .com P5