Page 7 - AfrOil Week 17 2022

AfrOil COMMENTARY AfrOil

The Angola-Zambia Oil Pipeline (AZOP), the clear whether the conversion of Tazama will
plans for which have gone through numerous impact plans for the implementation of AZOP.
iterations, is now expected to cost around $5bn,
roughly double the figure quoted around a dec- Cabinda concerns
ade ago. The Sonangol head also told reporters that
Also known as the Refined Petroleum Mul- the company was having to adapt its plans for
ti-Product and Natural Gas Pipeline Project another refinery project in light of recent devel-
(AZOP), it is expected to run 1,400 km through opments. The conflict between Russia and
the so-called Lobito Corridor, connecting the Ukraine has affected the NOC’s efforts to pro-
planned Lobito refinery in the coastal Benguela cure the steel it needs for the construction of an
Province to the Zambian capital Lusaka. The oil-processing plant in Cabinda, he explained.
conduit is expected to have a throughput capac- Last month, Faustino Conde Pongue, mem-
ity of 100,000 barrels of oil equivalent per day ber of the executive committee at Sonangol
(boepd), comprising gasoline, diesel and gas. Refining & Chemicals, said that the first ship-
The project was initially led by Zambian ments of equipment for the facility would begin
copper firm Basali Ba Liseli Resources, but the arriving in the second week of June.
company was not mentioned in the MoU, which Conde noted that a team of Sonangol tech- Currently, Zambia
was signed by Sonangol and Zambia’s Industrial nicians was monitoring the preparation of this
Development Corp. (IDC), who have taken up equipment in Houston. He also noted that imports nearly all
strategic equity positions. A shared-financing another delegation from Sonangol and MIREM- its fuel from the
agreement was struck in 2019. PET was due to travel to the US in late April to
Following FID, the pipeline could be oversee testing. Middle East
constructed within five years, generating The Cabinda refinery, which will have a
12,000-14,000 temporary jobs as well as 4,000 capacity of 60,000 bpd, is being constructed by
permanent jobs in each country once complete. UK-based Gemcorp Capital on the Malembo
Zambia’s ambassador to Angola Lawrence plan, around 30 km north of the provincial cap-
Chalungumana was quoted by Anadolu Agency ital. It is expected to produce gasoline, diesel,
as saying: “This milestone agreement will bring residual fuel oil and jet fuel.
to an end a more than 10-year-old complex According to plans announced in October
negotiation process that shall lead to cheaper 2020, the refinery will be built in three stages
fuel for Zambia.” with the first stage including the crude distilla-
Meanwhile, Azevedo noted that “the instal- tion unit (CDU), a kerosene treatment facility
lation of the new delivery system is vital to meet and storage tanks that can hold up to 1.2mn
the current demand in Zambia and the sub-re- barrels of oil. The second and third stages will
gion and also prepare for consumption in the involve doubling the plant’s capacity and adding
long term.” pipelines, a catalytic reformer, a hydrotator and
Currently, Zambia imports nearly all of its a catalytic cracking unit.
fuel from the Middle East, through the Tanza- Gemcorp envisages the first phase costing
nian port of Dar-es-Salaam, which is connected around $220mn, with the remaining $700mn
to the local 40,000 bpd Indeni refinery by the of the budgeted amount split across phases two
1,710-km Tazama pipeline. However, with Zam- and three. It holds a 90% stake in the $920mn
bia planning to close the refinery by the end of project and will be responsible for the cost of
the year, it agreed a deal last month to convert construction, while Sonaref owns the balance of
the Tazama conduit to enable it to transport equity. Following a 2020 FID, it awarded a con-
refined petroleum products. struction contract to Brazil’s Odebrecht Engen-
Zambian Finance Minister Situmbeko haria e Construção (OEC) to build the CDU.
Musokotwane said the move would help reduce So while Angola has made major strides
the cost of fuel in the country, much of which is with its long-awaited refining expansion, there
supplied to mines in the Copper Belt. It is not appear to be a few twists remaining in the tale. ™

Infrastructure networks in Lobito (Image: Sonangol)

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