Page 5 - AfrOil Week 19 2021

AfrOil COMMENTARY AfrOil

Meanwhile, Azevedo noted that “the installation successful completion of the high-conversion
of the new delivery system is vital to meet the Lobito refinery, it is noteworthy that little has
current demand in Zambia and the sub-region been heard of the long-planned downstream
and also prepare for consumption in the long facility for some time.” He added: “The lack of
term”. progress on the Lobito facility is the elephant
Currently, Zambia imports nearly all of its in the room here. We saw a flurry of activity in
fuel from the Middle East, through the Tanza- the Angolan refining sector in 2019, which has
nian port of Dar-es-Salaam, which is connected borne fruit in terms of the contract awards for
to the local 24,000 barrel per day Indeni refinery Soyo and Cabinda.”
by the 1,710-km Tazama pipeline. Alluding to the staged approach the two gov-
Indeni was closed for maintenance in ernments are taking to the pipeline, Simm said it
mid-December and had been expected to reo- was “unsurprising that they have elected to carry
pen last month, though workers’ unions have out two years of studies before moving forward.”
raised concerns about the Ministry of Energy He continued: “Even then, $2bn is a lot to com-
and Finance’s efforts to source crude for the mit to the project without an FID having been
facility and facilitate its re-opening. It currently taken on Lobito.”
covers around 40% of Zambia’s refined product Luanda has made refining progress, awarding
requirements. contracts for the construction of units at Soyo in
the northern Zaire Province and in the Cabinda
Terminal velocity exclave, but Sonangol and its downstream arm
Ahead of the AZOP MoU signing, Nkuwa vis- Sonaref are yet to announce the winner of a 2019
ited Barra do Dande, in Bengo Province around tender for a 200,000 bpd refinery at Lobito. The AZOP
50 km north of Luanda, where a planned marine Sonaref chairman Joaquim de Sousa Fer-
terminal has been on hold for around five years. nandes said that year that the project would be project is largely
Plans were announced in 2011 for Barra do completed in 2025, but there have been few signs
Dande to become the country’s main commer- of progress on a development that has been esti- dependent on
cial port as part of a plan to decongest the coun- mated to cost $8bn. the successful
try’s bustling ports. In May 2011, the oil ministry said that
Both the Lobito project and the Barra do Sonaref would process around 120,000 bpd dur- completion of the
Dande facility were suspended in 2016 to reas- ing its first stage of operation; however, recent
sess “the strategic vision of development and statements have made no mention of staged Lobito refinery
implementation” of the projects and to enable development.
their incorporation into a “new strategic vision” With the project having been in planning
encompassing all previous investments “in since the turn of the century, BP, Eni and Total
order to maximise their profitability”. have all previously held talks with Luanda about
However, Sonangol chairman Sebastião possible investment, and the Italian firm agreed
Martins said recently that work on the terminal in late 2015 to review Sonaref’s plans.
would resume in thie third quarter of this year A deal signed nearly a decade earlier with
ahead of completion in 2022. Chinese refining giant Sinopec to develop and
The company launched an engineering, pro- fund the scheme lapsed, while a front-end engi-
curement, construction and commissioning neering and design (FEED) study on the Lobito
(EPCC) tender for the facility, inviting bidders plant was completed by KBR in 2010. In mid-
to provide financing. 2015, Engineers India was awarded a contract
Martins said: “The area is strategically well for FEED validation and review of basic engi-
located”, with the terminal expected to “store neering and design.
refined products for internal distribution and A 1.5-square km site has been allocated
for the Lobito terminal, flowing from there to just to the north of Lobito. However, with the
Zambia.” Lobito and Barra do Dande are, how- Cabinda and Soyo plants expected to increase
ever, around 560 km apart. Angola’s total refining capacity to nearly 200,000
bpd, much will depend on the appetite to build
Refined reservations an export-only facility that, given concerns
Speaking to AfrOil, Ian Simm, Principal Advi- about the trajectory of the country’s upstream
sor at the IGM Energy consultancy, said: “With production, may prove even trickier than previ-
the AZOP conduit largely dependent on the ously envisioned. ™

Week 19 12•May•2021 www. NEWSBASE .com P5