Page 5 - DMEA Week 16 2022

DMEA COMMENTARY DMEA

the plans for which have gone through numer- will impact plans for the implementation of
ous iterations, is now expected to cost around AZOP.
$5bn, roughly double the figure quoted around
a decade ago. Cabinda concerns
Also known as the Refined Petroleum Mul- The Sonangol head also told reporters that
ti-Product and Natural Gas Pipeline Project the company was having to adapt its plans for
(AZOP), it is expected to run 1,400 km through another refinery project in light of recent devel-
the so-called Lobito Corridor, connecting the opments. The conflict between Russia and
planned Lobito refinery in the coastal Benguela Ukraine has affected the NOC’s efforts to pro-
Province to the Zambian capital Lusaka. The cure the steel it needs for the construction of an
conduit is expected to have a throughput capac- oil-processing plant in Cabinda, he explained.
ity of 100,000 barrels of oil equivalent per day Last month, Faustino Conde Pongue, mem-
(boepd), comprising gasoline, diesel and gas. ber of the executive committee at Sonangol
The project was initially led by Zambian Refining & Chemicals said that the first ship-
copper firm Basali Ba Liseli Resources, but the ments of equipment for the facility would begin
company was not mentioned in the MoU, which arriving in the second week of June.
was signed by Sonangol and Zambia’s Industrial Conde noted that a team of Sonangol tech-
Development Corp. (IDC) who have taken up nicians was monitoring the preparation of this
strategic equity positions. A shared-financing equipment in Houston. He also noted that
agreement was agreed in 2019. another delegation from Sonangol and MIREM-
Following FID, the pipeline could be PET was due to travel to the US in late April to
constructed within five years, generating oversee testing. The Cabinda refinery, which
12,000-14,000 temporary jobs as well as 4,000 will have a capacity of 60,000 bpd, is being con-
permanent jobs in each country once complete. structed by UK-based Gemcorp Capital on the
Zambia’s ambassador to Angola Lawrence Malembo plan, around 30 km north of the pro-
Chalungumana was quoted by Anadolu Agency vincial capital. It is expected to produce gasoline,
as saying: “This milestone agreement will bring diesel, residual fuel oil and jet fuel.
to an end a more than 10-year-old complex According to plans announced in October
negotiation process that shall lead to cheaper 2020, the refinery will be built in three stages
fuel for Zambia.” with the first stage including the crude distilla-
Meanwhile, Azevedo noted that “the instal- tion unit (CDU), a kerosene treatment facility
lation of the new delivery system is vital to meet and storage tanks that can hold up to 1.2mn
the current demand in Zambia and the sub barrels of oil. The second and third stages will
region and also prepare for consumption in the involve doubling the plant’s capacity and adding,
long term”. pipelines a catalytic reformer, a hydrotator and
Currently, Zambia imports nearly all of its a catalytic cracking unit. Gemcorp envisages
fuel from the Middle East, through the Tanza- the first phase costing around $220mn, with the
nian port of Dar-es-Salaam, which is connected remaining $700mn of the budgeted amount split
to the local 40,000-bpd Indeni refinery by the across phases two and three.
1,710-km Tazama pipeline. However, with Zam- Gemcorp holds a 90% stake in the $920mn
bia planning to close the refinery by the end of project and will be responsible for the cost of
the year, it agreed a deal last month to convert the construction, while Sonaref owns the balance
Tazama conduit to enable it to transport refined of equity. Following a 2020 final investment
petroleum products. decision (FID), Gemcorp awarded a construc-
Zambian finance minister Situmbeko tion contract to Brazil’s Odebrecht Engenharia e
Musokotwane said that the move would help Construção (OEC) to build the CDU.
reduce the cost of fuel in the country, much of While Angola has made major strides with its
which is supplied to mines in the Copper Belt. long-awaited reining expansion, there appear to
It is not clear whether the conversion of Tazama be a few twists remaining in the tale.™

Week 16 21•April•2022 www. NEWSBASE .com P5