Page 6 - AfrOil Week 17 2022

AfrOil COMMENTARY AfrOil

Sonangol to proceed with Lobito

refinery as Zambia wants in

Angola’s state oil firm has said it will proceed with its flagship refinery with even before it

agrees terms with a partner as the Zambian government looks to acquire a stake in the project

ANGOLA’S national oil company (NOC) NOC progress on the project has been slow. Sonangol
Sonangol has decided to move forward with the announced in 2019 that it had received 68 offers
WHAT: construction of a new refinery at Lobito, even in a tender for the right to build the refinery, but
Sonangol remains in talks though it has yet to choose a partner for the thus far, no winner has ever been announced. A
with potential partners project, according to the company’s president deal was signed in 2007 with Chinese refining
for the 200,000 bpd Sebastião Gaspar Martins. The government giant Sinopec to develop and fund the scheme
Lobito refinery, but has of Zambia has now moved to resume talks for while a FEED study on the Lobito plant was
said it will move forward Lusaka to take a stake in the refinery as the completed by KBR in 2010.
unilaterally. neighbouring countries develop a cross-border In 2011, the oil ministry said that Lobito
pipeline. would process around 120,000 bpd during its
WHY: Meanwhile, Gaspar Martins also noted con- first stage of operation. Meanwhile, Engineers
The facility is the largest cerns about material shortages that could have India Ltd was awarded a contract for FEED
of three planned refin-
eries across the country, an impact on the development of a refinery in validation and review of basic engineering and
though Sonangol also the northern Cabinda exclave. design in mid-2015. BP, Eni and TotalEnergies
cast concerns over the have all previously held talks with Luanda about
development of another Sole development possible investment, and the Italian firm agreed
unit in the Cabinda Martins indicated on April 18 that Sonangol in late 2015 to review the plans.
exclave. had chosen this strategy even though it had
hoped initially to follow a different path. “At the Zambian interest
WHAT NEXT: moment, we are deciding with which entities Shortly after the news of Sonangol’s plans to
Zambia is keen to take we are going to form the consortium and share- proceed with the project broke, Zambia’s energy
part in the Lobito project holder, but we intend to move forward with the minister revealed that he had asked Angola to
as it seeks to improve project, albeit with initial funds from Sonangol,” re-open the possibility for Lusaka to own a stake
long-term fuel supply he was quoted as saying by Ver Angola during a in the refinery. Posting on social media, Peter
security.
press briefing. “The decision has been taken, and Kapala said he had lobbied Luanda with a view
this refinery is moving forward.” to improving his country’s erratic fuel supply
Sonangol launched the tender during the situation.
summer, seeking private investors to take a 70% “[The government] is also looking at syn-
share in the $6bn project, which is seen being ergies with other economies in the region. We
completed in 2025 or 2026. However, this time- have successfully lobbied our Angolan counter-
line was provided by project co-ordinator Gui- parts to re-open the opportunity for Zambia to
omar Correia, based on early physical works own a stake in the Lobito Refinery project,” he
beginning in the second quarter of 2022. said. “On 14 April, 2022, Minister of Commerce,
Start-up guidance has now been set at Sep- Trade and Industry Chipoka Mulenga signed an
tember 2026-February 2027, while a front-end agreement in Luanda, Angola, to actualise this
engineering and design (FEED) study covering partnership. This opportunity will guarantee
a single-train facility with a hydrocracker is Zambia consistent access to the supply of petro-
expected to be completed by the end of this year. leum on a preferential basis.”
In October, five bids were submitted by Chi- The Lobito tie-up would accord with a
na’s LANPEC Technology and US-based Inter- memorandum of understanding (MoU) signed
national Business Development Group (IBD); between the countries in May last year to carry
Gemcorp and the local Omatapalo Engenharia out studies for the construction of a cross-bor-
& Construção; Hull Blyth Manpower, AVIC der refined product pipeline. The deal provided
International Beijing and China Huanquiu Con- for the two sides carry out feasibility studies on
tracting & Engineering; UK-based Layher; and the pipeline, a project that may take up to two
GazMin International of the UAE. Discussions years to complete.
with Sonangol remain ongoing. Following the study, which has been budg-
Angolan authorities began discussing plans eted at up to $2bn, Luanda and Lusaka will dis-
for the Lobito project around 20 years ago, but cuss taking a final investment decision (FID).

P6 www. NEWSBASE .com Week 17 27•April•2022