Page 7 - AfrOil Week 12 2022

AfrOil COMMENTARY AfrOil

In the presentation, he noted that the project remaining $700mn of the budgeted amount split
would involve more than 2,000 workers, most across phases two and three.
of whom will be young people hired locally. Gemcorp holds a 90% stake in the $920mn
Conde was also quoted by Angola’s state project and will be responsible for the cost of
press agency ANGOP as saying that discussions construction, while Sonaref owns the balance
were continuing over the lease of the site. “We of equity. Following a 2020 final investment
are negotiating a space belonging to Sonan- decision (FID), Gemcorp awarded a construc-
gol for the transfer of [a] 712-square km [site] tion contract to Brazil’s Odebrecht Engenharia
where the refinery will be built,” he said. “On e Construção (OEC) to build the CDU.
this ground, we will install the refinery and the In January, Angolan President João Lourenço
plant’s support facilities,” he added. told ANGOP that the first phase of construc-
Around a year ago, Angola’s Ministry of Min- tion on the refinery would be completed in
eral Resources and Petroleum (MIREMPET) mid-2022, giving the facility 50% of its planned
selected the Quanten consortium as the winner capacity. Lourenço noted that once complete,
of a $3.5bn tender to build, own and operate the refinery’s output will cater to the needs of
(BOO) the plant. According to Quanten, the the Cabinda province with any surplus to be
facility will produce “consumer-ready end prod- exported to neighbouring Congo (Kinshasa).
ucts such as gasoline, diesel, jet fuel and asphalt.”
The plant will ensure that Angola is “protected Lobito
from adverse geopolitical events” that cause Meanwhile, a decision is still awaited follow-
world crude oil prices to rise and will also ing a tender for investment in the largest of
employ stringent pollution and sulphur content the planned refineries, the 200,000 bpd unit at
requirements, the consortium said. Lobito in Benguela province.
The consortium comprises three US firms Sonangol launched the tender during the
(Quanten, TGT and Aurum & Sharp) and one summer, seeking private investors to take a
local technical services firm, ATIS Nebest-An- 70% share in the $6bn project, which is seen
gola. The group was awarded the contract fol- being completed in 2025 or 2026. However,
lowing a tender process launched in October this timeline was provided by project co-ordi-
2019. Between September and December 2020, nator Guiomar Correia based on early physical
due diligence was carried out by PwC on eight works beginning in the second quarter of 2022. Angola has at
bidders, with five consortia going through to Start-up guidance has now been set at Septem- long last made
the final round. China’s Jiangsu Sinochem Con- ber 2026-February 2027, while a front-end engi-
struction Co. was disqualified for insufficient neering and design (FEED) study covering a tangible progress
documentation. single-train facility with a hydrocracker is antic-
Little-known Quanten’s website outlines the ipated to be completed by the end of this year. on building a
consortium’s plans to design, construct, own In October, five bids were submitted: China’s
and operate the refinery, as well as a tank farm, LANPEC Technology Ltd and US-based Inter- downstream
a marine terminal for receiving feedstock and national Business Development Group (IBD); sector that will
exporting products and associated infrastruc- Gemcorp and the local Omatapalo Engenharia
ture facilities, including a power generation unit. & Construção; Hull Blyth Manpower, AVIC help it increase
International Beijing Co. and China Huanquiu
Cabinda Contracting & Engineering Co.; UK-based Lay- the value it
Also this week, Conde told local authorities in her Ltd; and GazMin International of the UAE. can garner
the Cabinda exclave, where Sonaref is building Angolan authorities began discussing plans
another greenfield refinery, that the first ship- for the Lobito project around 20 years ago, but from upstream
ments of equipment for this second plant would progress has been slow. Sonangol did sign a deal
start arriving in the second week of June. in 2007 with China’s Sinopec to develop and production
Conde noted that a team of Sonangol tech- fund the scheme, while a FEED study on the
nicians was monitoring the preparation of this Lobito plant was completed by KBR in 2010.
equipment in Houston. He also said another del- Then In 2011, Angola’s oil ministry said
egation from Sonangol and MIREMPET would that the Lobito refinery would process around
travel to the US in late April to oversee testing. 120,000 bpd during its first stage of operation.
The Cabinda refinery, which will have a Meanwhile, Engineers India Ltd was awarded a
capacity of 60,000 bpd, is being constructed contract for FEED validation and review of basic
by UK-based Gemcorp Capital around 30 km engineering and design in mid-2015.
north of the provincial capital. It is slated to pro- BP, Eni and Total have all previously held
duce gasoline, diesel, residual fuel oil and jet fuel. talks with Luanda about possible investment,
According to plans announced in October and the Italian firm agreed in late 2015 to review
2020, the refinery will be built in three stages, the plans. And in 2019, Sonangol said it had
with the first stage including the crude distilla- received 68 offers in a tender for the right to
tion unit (CDU), a kerosene treatment facility build the plant but never named a winner.
and storage tanks that can hold up to 1.2mn There is still a long way to go before the three
barrels of oil. The second and third stages will facilities are completed, but Angola has at long
involve doubling the plant’s capacity and add- last made tangible progress on building a down-
ing pipelines, a catalytic reformer, a hydrotator stream sector that will help it increase the value
and a catalytic cracking unit. The first phase it can garner from upstream production, open-
is expected to cost around $220mn, with the ing up diversification opportunities. ™

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