Page 5 - DMEA Week 19 2021

DMEA COMMENTARY DMEA

Anticipated location of
Lobito refinery.

Source: Google

Dande to become the country’s main commer- carry out two years of studies before moving
cial port as part of a plan to decongest the coun- forward. Even then, $2bn is a lot to commit to
try’s bustling ports. the project without an FID having been taken
Both the Lobito project and the Barra do on Lobito”.
Dande facility were suspended in 2016 to reas- Luanda has made refining progress, awarding
sess “the strategic vision of development and contracts for the construction of units at Soyo in
implementation” of the projects and to enable the northern Zaire Province and in the Cabinda
their incorporation into a “new strategic vision” exclave, but Sonangol and its downstream arm
encompassing all previous investments “in order Sonaref are yet to announce the winner of a 2019
to maximise their profitability”. tender for a 200,000 bpd refinery at Lobito.
However, Sonangol chairman Sebastião Sonaref chairman Joaquim de Sousa Fer-
Martins said recently that work on the terminal nandes said that year that the project would be
would resume in Q3 this year ahead of comple- completed in 2025, but there have been few signs
tion in 2022. of progress on a development that has been esti-
The company launched an engineering, pro- mated to cost $8bn.
curement, construction and commissioning In May 2011, the oil ministry said that
(EPCC) tender for the facility, inviting bidders Sonaref would process around 120,000 bpd dur-
to provide financing. ing its first stage of operation; however, recent
Martins said: “The area is strategically well statements have made no mention of staged
located”, with the terminal expected to “store development.
refined products for internal distribution and for With the project having been in planning
the Lobito terminal, flowing from there to Zam- since the turn of the century, BP, Eni and Total
bia.” Lobito and Barra do Dande are, however, have all previously held talks with Luanda about
around 560 km apart. possible investment, and the Italian firm agreed
in late 2015 to review Sonaref’s plans.
Refined reservations A deal signed nearly a decade earlier with
Speaking to NewsBase, Ian Simm, Principal Chinese refining giant Sinopec to develop and
Advisor at consultancy IGM Energy said: “With fund the scheme lapsed, while a front-end engi-
the AZOP conduit largely dependent on the neering and design (FEED) study on the Lobito
successful completion of the high-conversion plant was completed by KBR in 2010. In mid-
Lobito refinery, it is noteworthy that little has 2015, Engineers India was awarded a contract for
been heard of the long-planned downstream FEED validation and review of basic engineering
facility for some time.” and design. A 1.5-square km site has been allo-
He added: “The lack of progress on the Lobito cated just to the north of Lobito.
facility is the elephant in the room here. We saw However, with the Cabinda and Soyo plants
a flurry of activity in the Angolan refining sector expected to increase Angola’s total refining
in 2019, which has borne fruit in terms of the capacity to nearly 200,000 bpd, much will
contract awards for Soyo and Cabinda.” depend on the appetite to build an export-only
Alluding to the staged approach the two gov- facility that, given concerns about the trajectory
ernments are taking to the pipeline, Simm noted of the country’s upstream production, may prove
that it is “unsurprising that they have elected to even trickier than previously envisioned.™

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