Page 4 - DMEA Week 19 2021

DMEA COMMENTARY DMEA

AZOP pipeline moves forward

with construction study

Angola and Zambia have agreed to carry out a study for the

construction of a cross-border fuel pipeline connecting a planned

refinery on the Angolan coast to diversify Zambian fuel supplies.

AFRICA THE governments of Angola and Zambia Following FID, the pipeline could be The pipeline is likely to
have signed a memorandum of understanding constructed within five years, generating largely follow the route
(MoU) to carry out studies for the construction 12,000-14,000 temporary jobs as well as 4,000 of the Benguela railway.
WHAT: of a refined product pipeline linking the two permanent jobs in each country once complete.
The governments signed countries. Zambian Ambassador to Angola Lawrence
an MoU covering a study The deal signed between Angolan Minister Chalungumana was quoted by Anadolu Agency
worth up to $2bn to of Mineral Resources and Petroleum Diaman- as saying: “This milestone agreement will bring
determine the feasibility tino Azevedo and Zambian Minister of Energy to an end a more than 10-year-old complex
of the 1,400-km pipeline Mathew Nkuwa will see the two sides carry out negotiation process that shall lead to cheaper
project. feasibility studies on the pipeline, a project that fuel for Zambia.”
may take up to two years to complete. Follow- Meanwhile, Azevedo noted that “the instal-
WHY: ing the study, which has been budgeted at up to lation of the new delivery system is vital to meet
The two countries have $2bn, Luanda and Lusaka will discuss taking a the current demand in Zambia and the sub-re-
been in discussions over final investment decision (FID). gion and also prepare for consumption in the
the pipe for around a The Angola-Zambia Oil Pipeline (AZOP), long term”.
decade. the plans for which have gone through numer- Currently, Zambia imports nearly all of its
ous iterations, is now expected to cost around fuel from the Middle East, through the Tanza-
WHAT NEXT: $5bn, roughly double the figure quoted around nian port of Dar-es-Salaam, which is connected
With the Lobito refinery a decade ago. to the local 24,000 barrel per day Indeni refinery
remaining on the drawing Also known as the Refined Petroleum Mul- by the 1,710-km Tazama pipeline.
board, a lot must fall into ti-Product and Natural Gas Pipeline Project Indeni was closed for maintenance in
place before ground will (AZOP), it is expected to run 1,400 km through mid-December and had been expected to reo-
be broken on the pipeline. the so-called Lobito Corridor, connecting the pen last month, though workers’ unions have
However, the latest planned Lobito refinery in the coastal Benguela raised concerns about the Ministry of Energy
agreement provides at Province to the Zambian capital, Lusaka. The and Finance’s efforts to source crude for the
least a glimmer of hope conduit is expected to have a throughput capac- facility and facilitate its re-opening. It currently
for progress. ity of 100,000 barrels of oil equivalent per day covers around 40% of Zambia’s refined product
(boepd), comprising gasoline, diesel and gas. requirements.
The project was initially led by Zambian cop-
per firm Basali Ba Liseli Resources, but the com- Terminal velocity
pany was not mentioned in the MoU, which was Ahead of the AZOP MoU signing, Nkuwa vis-
signed by Angolan state oil firm Sonangol and ited Barra do Dande, in Bengo Province around
Zambia’s Industrial Development Corp. (IDC), 50 km north of Luanda, where a planned marine
which have taken up strategic equity positions. A terminal has been on hold for around five years.
shared-financing agreement was agreed in 2019. Plans were announced in 2011 for Barra do

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