Page 4 - DMEA Week 18 2022

DMEA COMMENTARY DMEA

An African pipeline revival

A flurry of pipeline activity has broken out across the continent, with projects ranging
from ambitious to highly unlikely, as interconnectivity assumes some strategic focus.

AFRICA SEVERAL announcements have been made in uptick in sentiment towards Namibia’s upstream,
recent weeks about new and re-imagined pipe- with major finds having been announced in
line projects across Africa as consumer nations recent months.
WHAT: look to establish new supply arteries and produc- Meanwhile, Zambia appears to be keeping its
Pipelines have risen ers seek routes to new markets. options open, with Kapala saying last month that
to prominence across From West to East and South to North, he had successfully lobbied Angola to reopen the
Africa in recent months ambitious projects are in the works that could possibility of the landlocked country acquiring a
as resource-scarce improve interconnectivity, but alongside that stake in Sonangol’s long-planned (and long-de-
countries look for ambition lies abundant concern about the com- layed) Lobito oil refinery. Work is set to soon kick
supplies closer to home. plexity of completing such large initiatives. off on the $6bn, 200,000 bpd plant, and Kapala
announced that such a partnership would “guar-
WHY: Nam-Zam antee Zambia consistent access to the supply of
While spot prices often Perhaps the most achievable of the projects was petroleum on a preferential basis.”
proved favourable during announced this week by the Zambian govern- The two countries signed an MoU a year ago
periods of low oil prices, ment. Minister of Energy Peter Kapala said to carry out two years of studies for the construc-
high prices are seeing that his country would sign a memorandum tion of a cross-border refined product pipeline.
more governments look of understanding (MoU) with authorities in The Angola-Zambia Oil Pipeline (AZOP), the
to lock in discounts in Namibia next month for the development of an plans for which have gone through numerous
exchange for guaranteed oil and gas pipeline to connect the two. iterations, is now expected to cost around $5bn,
offtake. Kapala said that the conduit would run from roughly double the figure quoted around a dec-
Windhoek to Lusaka, supplying gas for power ade ago.
WHAT NEXT: generation and oil to reduce the cost of petro- Also known as the Refined Petroleum Mul-
These ambitious projects leum products in Zambia. ti-Product and Natural Gas Pipeline Project
are unlikely to be all However, with Zambia apparently intent on (AZOP), it is expected to run 1,400 km through
completed and those shutting down its sole, 40,000 barrel per day the so-called Lobito Corridor, connecting the
that do will be highly (bpd) Indeni refinery by the end of the year, Lobito plant in the coastal Benguela Province
capital-intensive. questions must be raised about where the piped to Lusaka. The conduit is expected to have a
crude will be processed. Meanwhile, in March, throughput capacity of 100,000 barrels of oil
Lusaka agreed a deal to convert the 1,710-km equivalent per day (boepd), comprising gaso-
Tanzania-Zambia oil (Tazama) pipeline to trans- line, diesel and gas.
port refined petroleum products ahead of the The project was initially led by Zambian
refinery’s planned closure. Almost all of Zambia’s copper firm Basali Ba Liseli Resources, but the
feedstock and fuels – sourced from the Middle company was not mentioned in the MoU, which
East – is currently delivered from the Tanzanian was signed by Sonangol and Zambia’s Industrial
port of Dar-es-Salaam via Tazama. Development Corp. (IDC) who have taken up
The announcement comes amid a significant strategic equity positions.

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