*This article will be published in the upcoming AES: Angola COVID-19 Impact Report
The Angolan government has launched an ambitious strategy to develop its refining capabilities and reduce its reliance upon and associated costs with imported fuel volumes, aiming to increase capacity from 80,000 bpd to 360,000 bpd through a series of works by 2025.
With current oil refining capacity in Angola meeting just 20% of domestic fuel consumption needs, the country’s downstream sector has long-remained an untapped opportunity to add in-country value to crude oil production. Furthermore, COVID-19 has propelled downstream development to the forefront of national security, as global and regional supply chains face disruption and the Angolan government seeks to generate diversified sources of revenue. In the short-term, one key refurbishment and one construction project remain on track for a 2021 completion – in addition to two, longer-term refinery constructions (2024, 2025) – which carry substantial potential to offset export losses and contribute to a diversified, self-sustaining national economy.
Upgrade: Luanda Refinery
Italian EPC contractor Kinetics Technology, a subsidiary of Maire Tecnimont Group, was awarded the contract to refurbish Angola’s Luanda refinery. Besides a small-scale, 15,000 bpd refinery that refines Jet-A1, diesel and LPG gas from the Malongo-Cabinda field, the Luanda refinery is the only refining facility in the country. The upgrading project will enable the refinery to produce 1,200 million tons of gasoline per year, up from current output of 380 million tons, through the installation of two new processing units. Construction of the units, which include a naphtha hydrotreater and catalytic reforming unit, will take around two and a half years, with expected completion by mid-2021.
Launch: Cabinda Refinery
In June 2020, Gemcorp Capital completed its preliminary work for the construction of the Cabinda oil refinery, including de-mining, land clearance and site preparation on 38 hectares of land.
The investment management firm also finished the front-end engineering and design on the Inside Battery Limits component for the refinery crude distillation unit and merox unit, as well as the Outside Battery Limits component on the tanks, supporting infrastructure and power.
In May 2020, Gemcorp received a license for and completed the initial design of the conventional buoy mooring system, enabling large vessels to service the refinery. As a result, the project is on track for construction to begin in August 2020 and for the first 30,000 bpd phase to come online by late 2021.
The refinery will prioritize the production of diesel, gasoline, Jet A1 and naphtha for domestic consumption. The second phase will add an additional 30,000 bpd, and will include a reformer that will convert straight-run naphtha into gasoline. The third and final phase will see the addition of a hydrocracker, enabling heavy fuel to be converted into gasoil, and is planned for completion by the end of 2023.
Launch: Soyo Refinery
Due to COVID-19, the Ministry of Mineral Resources, Petroleum and Gas postponed the announcement of the winner of the Soyo refinery tender, launched in October 2019 and initially set to be announced in March 2020. Out of 31 interested companies, 15 companies submitted bids and nine were validated. The selected company or joint venture will be responsible for financing the construction of the plant on a Build-Operate- Transfer basis. Adding 100,000 bpd to domestic refining capacity, the refinery is expected to be completed by 2024.
Launch: Lobito Refinery
The Lobito refinery represents Angola’s longest-term and most ambitious refining project, aimed for completion by 2025 and projected to add 200,000 bpd of refining capacity. However, construction of the plant has faced ongoing delays due to high costs and the question of financial viability.