Page 4 - DMEA Week 25 2021

DMEA COMMENTARY DMEA

Sonangol seeks advisor for

Lobito refinery company

Angola’s state oil firm is seeking assistance in the formation of a
company to build and operate its flagship refining project at Lobito.

AFRICA ANGOLAN national oil company (NOC) said it expects the Lobito plant to be finished by
Sonangol announced this week that it is pre- 2025.
paring to launch a tender for advisory services A 1.5-square km site has been allocated just
WHAT: related to the establishment of the company that north of Lobito. As previously conceived, the
Sonangol is looking for will operate a newbuild refinery in Lobito and to refinery would be built in two phases – the first
partners to assist with the financing of the refinery project. comprising low-conversion units aimed at satis-
the development of the According to a company statement, Sonan- fying local demand, and the second upgrading
facility and appears to gol will begin accepting offers for the contract the plant’s complexity to produce higher-quality
be willing to part with on July 9. It will formally launch the bidding fuels suitable for export.
an equity stake in the process at an event where it is due to present the A deal was signed in 2007 with Chinese
project. results of a preliminary feasibility study of the refining giant Sinopec to develop and fund the
project, which envisions the construction of a scheme, while a front-end engineering and
WHY: new oil-processing plant in several stages. The design (FEED) study on the Lobito plant was
The 200,000-bpd refinery proposed final stage would bring the facility’s completed by KBR in 2010.
has been on the drawing throughput capacity up to 200,000 barrels per In 2011, the oil ministry said that Lobito
board for two decades day (bpd). would process around 120,000 bpd during its
and progress has been The NOC said it intended to explain the first stage of operation.
limited to the designation requirements for participation in the tender at Meanwhile, Engineers India Ltd was awarded
of a site north of the port the event. It also said it would reveal the dead- a contract for FEED validation and review of
city. lines for submitting bids for the contract on the basic engineering and design in mid-2015.
same day. BP, Eni and Total have all previously held
WHAT NEXT: Meanwhile, Downstream MEA (DMEA) talks with Luanda about possible investment,
Development work is also understands that the process will allow Sonangol and the Italian firm agreed in late 2015 to review
kicking off on smaller to select its partners for the implementation of the plans.
refineries at Cabinda the project, with these partners to hold a stake in
and Soyo as well as the the facility when complete. This appears to sug- Soyo progress
overhaul of the Luanda gest that the tender may lead to opportunity for During Q1 this year, Angola’s Ministry of Min-
unit as the country seeks investors to acquire an equity share. eral Resources and Petroleum (MIREMPET)
to become one of the key awarded a $3.5bn build, own and operate (BOO)
players in sub-Saharan Broad plans contract for the construction of a 100,000 bpd
African refining. Plans to build the Lobito unit in Benguela Prov- facility at Soyo in northern Zaire Province to a
ince are part of a broader strategy to modernise consortium led by California-based electrical
and expand Angola’s refining capabilities, which contractor Quanten.
are currently limited to the ageing 38,000 bpd According to Quanten, the facility will pro-
Luanda refinery near the capital, and to reduce duce “consumer-ready end products such as gas-
dependence on imported fuels. oline, diesel, jet fuel and asphalt, and is protected
The programme also provides for the con- from adverse geopolitical events” and will also
struction of another two refineries in Soyo and employ stringent pollution and sulphur content
Cabinda and for the modernisation and upgrade requirements when it comes into operation in
of the existing Luanda facility. 2024.
Angolan authorities began discussing plans The winning consortium is comprised
for the Lobito project around 20 years ago, but of US firms Quanten, TGT and Aurum &
progress on the project has been slow. Sonangol Sharp and local technical services firm ATIS
announced in 2019 that it had received 68 offers Nebest-Angola.
in a tender for the right to build the refinery, but The group came out on top, following a ten-
thus far it has not named any winners in the bid- der process that was launched in October 2019.
ding process. The cost of the scheme has been Between September and December 2020, due
estimated at around $8bn. diligence was carried out by PwC on eight bid-
Sonaref, the state oil firm’s refining arm, has ders, with five consortia going through to the

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