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AfrOil COMMENTARY AfrOil
Luanda and Lobito
The government took another significant step towards fuel self sufficiency earlier in July when a new gasoline production facility was launched at the Luanda refinery, located outside the cap- ital. The gasoline unit is also integrated with a combined cycle power plant that will have a gen- eration capacity of 5 MW.
Its launch increased Angola’s gasoline pro- duction from 300 tonnes per day to 1,200 tonnes per day, all of which comes from the Luanda refinery, where a $235mn project is underway to return processing capacity to its nameplate level of 65,000 bpd, then expanding this figure to 72,000 bpd. The Ministry of Mineral Resources, Oil and Gas estimates that the project will save the government around $200mn per year.
At present, Angola’s only other active refin- ing capacity is the 15,000-bpd Malongo Topping plant operated by Chevron subsidiary CAB- GOC in Cabinda, which is designed for LPG recovery.
The largest of the planned refineries is the 200,000-bpd facility, which has been in planning in various guises for around 20 years.
Despite having not yet chosen a partner for the project, Sonangol announced in April that it would move forward with the construction
phase. The company launched a tender in mid- 2021, seeking private investors to take a 70% share in the $6bn project which is seen being completed in 2025 or 2026, though this timeline was based on early physical works beginning in the second quarter of 2022.
In June, Sonangol was forced to return to the drawing board after the tender failed to attract any satisfactory bids as pitches were rejected for financial or technical shortcomings, while a Chinese bid was turned down on the basis that offtake would have been exported.
According to Secretary of State for Oil, Gas and Petrochemicals José Barroso, Sonangol must return to feasibility studies to resolve a “small problem” with an environmental element.
He added: “Unfortunately, the proposals received do not satisfy even Sonangol ... and I am talking about financial and technical propos- als. In general, they were far beyond what was necessary, we are in feasibility studies, it is our purpose that it does not cost more than $5bn.”
Despite the delays at Lobito, achievements at Cabinda, Luanda and Soyo are greater than any other downstream progress Angola has made in at least a decade and the country will have a fuel surplus even before the larger facility comes into operation. ™
Despite the delays at Lobito, achievements at Cabinda, Luanda and Soyo are greater than any other downstream progress in at least a decade
PIPELINES & TRANSPORT
Malawi still hunting for pipeline backing
MALAWI
THE government of Malawi said this week that it still hopes to build an oil pipeline that has been in planning for more than a decade, noting that it requires an investor for the project.
Speaking to local media this week, Ministry of Energy (MoE) spokesperson Upile Kamoto said that an investor continues to be sought to back the construction of an oil conduit running from either Beira or Nacala in Mozambique to Malawi’s second city, Blantyre. It had pre- viously been envisaged running to the border town of Nsanje, but Kamoto said that Blantyre was chosen owing to the city’s higher density of oil marketing company offices and fuel storage facilities.
She said: “Since 2010 the ministry has been trying to find an investor to conduct feasibil- ity study, design and construct the pipeline.” Kamoto noted that the line is expected to be constructed under a build, own, operate and transfer (BOOT) arrangement.
“There is no breakthrough in terms of find- ing an investor or finances for the project,” Kamoto added.
With a feasibility study yet to be completed, she did not provide an estimated cost for the pro- ject, but referenced a World Bank study, which gave an indicative price of $64,300 per inch to construct such a pipeline in sub-Saharan Africa,
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Route proposed for Mozambique-Malawi-Zambia fuel pipe in 2016 (Image: SSRPC)
adjusting for terrain and labour costs. However, previous studies estimated the total cost of the project at $150mn.
Expressions of interest (EoIs) were sought by the MoE in 2010 following completion of a prefeasibility study by Qatari firm Vanessia Petroleum. This study envisaged a pipeline with a capacity of at least 900mn litres per year of diesel, gasoline and paraffin, with the Malawian government for LPG and crude to flow through it too.
Their inclusion would be predicated on the construction of a refinery at Nsanje, which has never materialised.