Page 5 - DMEA Week 28 2021

DMEA COMMENTARY DMEA

Zambian capital Lusaka. talks with Luanda about possible investment,
The conduit is anticipated to have a through- and the Italian firm agreed in late 2015 to review
put capacity of 100,000 barrels of oil equivalent the plans.
per day (boepd), comprising gasoline, diesel and Progress is also being made in the northern
gas sourced from Sonangol’s planned refinery. Cabinda exclave, where UK-based Gemcorp
The project was initially led by Zambian Capital recently awarded a contract to Odebre-
copper firm Basali Ba Liseli Resources, but the cht Engenharia e Construção (OEC) to build a
company was not mentioned in a recent mem- crude distillation unit (CDU) as part of a project
orandum of understanding (MoU) which was to develop a 60,000 bpd refinery.
signed by Angolan state oil firm Sonangol and The UK-based company holds a 90% stake
Zambia’s Industrial Development Corp. (IDC), in the $920mn project alongside state-owned
who have taken up strategic equity positions. A Sonangol Refining (Sonaref). Gemcorp took a
shared-financing agreement was struck in 2019. final investment decision (FID) on the project
last October, saying that the partners intend to
Progress build the facility in stages.
Angola has appeared close to significant progress The first stage will involve the construction of
on the Lobito refinery at various points over the a CDU with a capacity of 30,000 bpd, as well as
past 15 years, but given the importance now storage tanks that can hold up to 1.2mn barrels of
seemingly accorded to the downstream sector, oil, while the second and third stages will involve
there is hope that this effort will finally bear fruit. doubling the plant’s capacity and adding second-
Angolan state news outlet Angop noted that ary processing facilities.
Africa Finance Corp.’s (AFC) deputy director The refinery will be built on the Malembo
Ini Urua last week expressed an interest in the Plain, around 30 km north of the provincial cap-
Lobito unit as well as another 100,000 bpd unit at ital, and is expected to produce gasoline, diesel,
Soyo and the Barra do Dande terminal. fuel oil and Jet A1.
A deal was signed in 2007 with Chinese According to Gemcorp, the first phase
refining giant Sinopec to develop and fund the will cost around $220mn, with the remaining
scheme, while a front-end engineering and $700mn of the budgeted amount split across
design (FEED) study on the Lobito plant was phases two and three. The company previously
completed by KBR in 2010. said it anticipated operations commencing
In 2011, the oil ministry said that Lobito early next year, though this timeline appears
would process around 120,000 bpd during its ambitious.
first stage of operation. With Angolan Secretary of State for Oil and
Meanwhile, Engineers India was awarded a Gas José Alexandre Barroso saying last week that
contract for FEED validation and review of basic the refinery could come into operation by mid-
engineering and design in mid-2015. 2022, optimism around Angolan refining has
BP, Eni and Total have all previously held reached an all-time high.™

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