Overall refining output in Africa remains low as many refineries remain closed or are operating intermittently, according to Africa-focused oil consultancy CITAC.
In South Africa alone, refinery output fell 28% last year as all refineries were closed in April and May due to the lockdown.
In April, South Africa’s Engen said it will be proceeding with the conversion of its Durban refinery into a terminal. Astron Energy’s Cape Town will remain closed until 2022, after an incident in July 2020, S&P Global Platts data reported earlier.
Elsewhere in Africa, Cameroon’s Limbe refinery, which suffered from a fire at the end of May 2019, remains offline, while Ghana’s Tema refinery is operating intermittently, Platts had reported.
In Nigeria, all four NNPC refineries have not had any output since the second quarter of 2019, CITAC said. Operations at Port Harcourt could start soon after the necessary financing was secured for an upgrade, although no timeline has been announced yet, Platts reported earlier.
Meanwhile, African oil demand is recovering steadily with demand likely to reach to pre-pandemic levels by the second half of this year, with imports continuing to account for a larger share of total fuel needs, analysts said on April 28. CITAC said oil consumption is expected to return to pre-pandemic levels from H2 2021 and exceed it by Q3 2022.
CITAC’s Executive Director Elitsa Georgieva said demand fundamentals remain positive for the long term, with the product mix shifting towards lighter oil products as a result of the coronavirus pandemic and the energy transition. “Despite some changes in consumption patterns and energy mix shifts, overall consumption grows,” Georgieva said in a webinar. “2022 demand is expected to be 3.2% above 2019.”
Similarly, S&P Global Platts Analytics expects African oil demand to reach 4.75 million b/d in Q4 2021, the highest since Q4 2019 when it was at 4.94 million b/d. For 2021, demand will average 4.50 million b/d, up from 4.37 million b/d in 2019, Platts Analytics added.
Near-term maintenance
New and revised entries
** Zambia’s Indeni refinery remains offline after the government halted annual maintenance that began Dec. 23 due to financial challenges, a source with knowledge of the matter said May 17. The maintenance work was originally scheduled to last one month. The government wants to overhaul the aging refinery and until that work is carried out, it will rely on short-term contracts with private oil companies for the supply of oil products, the source said. “The project is on hold until after the next budget slated for September and after the presidential elections,” the source said. The country has also been in talks with the International Monetary Fund for a long-awaited economic program that has held up debt restructuring talks with external creditors. Zambia is due to hold presidential and parliamentary elections on Aug. 12. According to the source, the government was slated to allow operations at the refinery to resume in February but the need for expensive spare parts and the effects of the COVID-19 pandemic have delayed the restart. The refinery could now reopen close to the end of the year. In 2018, Zambia short-listed five companies, including Glencore Energy and Sahara Energy Resources, to buy stakes in the refinery but has since been delayed while the pandemic further hampered talks.
Existing entries
** South Africa’s Engen said it will be proceeding with the conversion of its Durban refinery into a terminal. “This considered decision was not taken lightly and follows an extensive strategic evaluation of Engen’s refining business”, the company said, adding that “the substantive cost of investment for upgrades required to bring the refinery in line with evolving quality and emissions regulation, were also part of the strategic review considerations.” The refinery has been shut since a fire and explosion broke out there on Dec. 4, 2020. Engen has previously said it was “considering several options” for the refinery, although no decision has been made. The company added April 23 it had commissioned reports that “confirmed that the refinery is not financially viable.” The refinery-terminal conversion is expected to be commissioned in Q3 2023.
** Libya’s Ras Lanuf remains offline without any timeline for its restart. The refinery was shut in 2013. However, Libya’s National Oil Corp. has won an arbitration case against the Libyan Emirates Oil Refining Company, which could lead to the reopening of the Ras Lanuf refinery.
** South Africa’s Astron Energy Cape Town refinery is expecting to restart “at some point” in 2022, the company said. The refinery, which closed after an incident in 2020, is “in the process of implementing various initiatives necessary to ensure the safe restart.” The refinery has been halted since an incident in July 2020 involving a fire.
** The refinery in Pointe Noire, Republic of Congo, will go into turnaround in 2021, but dates have not been finalized.
** Cameroon’s Limbe refinery, which suffered from a fire at the end of May 2019, remains offline. Local media reported the restart is not expected until 2021. During a Russia-Africa summit, officials said that Russian companies could get involved in the reconstruction of the plant.
Upgrades
New and revised entries
** KBR said April 27 that it has been awarded a contract from South Africa’s Sapref for its FCC regenerator project. The project will allow the refinery “to improve the reliability and integrity of the FCC unit by optimizing its catalyst and air distribution,” KBR said in a statement.
Existing entries
** State-owned Nigerian National Petroleum Corp., or NNPC, has signed an engineering, procurement and construction (EPC) contract with Italy’s Maire Tecnimont for the rehabilitation of the Port Harcourt refinery, it said April 2021. The overhaul will cost $1.5 billion, according to NNPC, and it hopes to raise the plant’s utilization rate to 90% of its nameplate 210,000 b/d capacity. The Nigerian Government officially approved the $1.5 billion financing which will be used to revamp the country’s largest oil refinery complex. The repairs will be carried out in three phases of 18, 24 and 44 months respectively. In late March, the Nigerian government gave NNPC the all-clear to undertake the repairs of the Port Harcourt refinery, with the African Export-Import Bank (Afreximbank) providing a $1 billion credit facility and the state-owned company accounting for the $500 million balance. Nigeria’s refineries, which include the northern Kaduna and the Warri plants, have been shut for repairs since early 2019 and NNPC says it expects them to operate at around 90% of capacity when the repairs are completed and they resume production by 2023. But this timeline could be changed as 2020 saw numerous delays, exacerbated by the coronavirus pandemic. Work on the repairs at the Warri and Kaduna plants would commence immediately after the works at Port Harcourt.
** State-run Indeni Oil Refinery, Zambia’s only refinery, has plans to double its capacity to 2.2 million mt/yr once rehabilitation works are completed. This will be up from the current capacity of 1.1 million mt/year. The 1970s-built refinery needs rehabilitation and the government has been in the markets lately looking for an investor in the Indeni refinery to support future upgrade of the plant with the objective of improving the output and efficiency of its operations. Authorities have approved the sale of a 49% stake in the plant.
** Kenya is considering converting its shuttered Mombasa refinery to a biofuel plant using technology provided by Italy’s Eni, the Italian energy major said Dec. 18. Eni said it discussed the proposal as part of a potential raft of clean energy initiatives at a meeting between its CEO Claudio Descalzi and Kenya’s President Uhuru Kenyatta in Nairobi. “The parties have identified strategic lines to implement a multi-year plan to incentivize separate collection of waste and agricultural residues, which are the ideal raw material for biofuel plants, able to produce bio-diesel, bio-jet and bio-ethanol,” Eni said in a statement. The Mombasa refinery, Eastern Africa’s sole refinery, was shut down in 2013 after former joint owner, India’s Essar, ditched plans to upgrade the plant on the grounds it was not economically viable. Essar sold its 50% stake in the plant back to the government later that year.
** TechnipFMC said it has “successfully completed the remaining conditions to enable work to commence” on the EPC contract for the engineering, procurement, and construction of a new hydrocracker at Egypt’s Assiut refinery. The contract includes process units such as vacuum distillation, diesel hydrocracker, delayed coker, distillate hydrotreater and a hydrogen production facility. The project also includes other process units as well as interconnecting. It will transform lower value products into approximately 2.8 million mt/year of cleaner products, such as Euro 5 diesel. Egypt is in the process of upgrading its refineries. The upgrade at Assiut includes the installation of 880,000 mt/year continuous catalytic reforming and isomerization complex, a 400,000 mt/year vapor recovery unit and 2.3 million mt/year hydrocracker, Platts reported previously.
** The European Bank for Reconstruction and Development has reviewed a provision of up to $250 million sovereign loan to the Alexandria Petroleum Company to finance resources and energy efficiency investments and other modernization investments. The project, which is estimated at $647 million, aims to improve the refinery’s efficiency while enhancing its productivity from increasing its output of Euro 5 diesel. It includes the installation of a new vapor recovery unit, continuous emissions monitoring system and a burner management system. Currently, there is environmental and social due diligence ongoing. The expansion program at Egypt’s state-owned Middle East Oil Refinery near Alexandria, is on track for 2022, which will push capacity to 160,000 b/d.
** The European Bank for Reconstruction and Development, or EBRD, approved a $50 million loan for an upgrade of Egypt’s Suez refinery aimed at introducing cleaner fuel and reducing CO2 emissions. It was the second loan by EBRD, which aims to “increase the flexibility of the plant’s crude intake and allow for the production of higher quality fuels and lower sulfur fuels.”
** Italy’s Kinetics Technology has been awarded a contract to build a fluid catalytic cracker at Angola’s sole oil refinery in Luanda. The unit would take around 2.5 years to complete. Sonangol is working with Eni for the refurbishment of the Luanda plant. The construction of the fluid catalytic cracker at the Luanda refinery will enable it to produce 1,200 mt/day of gasoline, up from current output of 380 mt/day. The unit is expected to come online mid-2021.
** Cote d’Ivoire’s SIR has secured a Eur577 million ($657 million) debt financing deal from Africa Finance Corporation, or AFC, which will help fund the upgrade of the refinery.
** Senegal’s Dakar refinery is planning to increase capacity to 1.5 million mt/year.
Launches
New and revised entries
** KBR said May 10 that it has been awarded a front-end engineering design, or FEED, for Bua Group’s new, modern refinery facility in Nigeria. KBR said it had “successfully completed the conceptual feasibility study for the project in 2018.” Elements of the new plant will include sulfur removing and water treatment facilities as well as heat integration “to ensure long standing efficiency of production.” The new refinery will help reduce Nigeria’s “dependence on imported supply”, KBR, which delivers science, technology and engineering solutions, said in the statement. Bua Group plans to build a 200,000 b/d integrated refinery and petrochemical plant in Akwa Ibom, according to its website. The plant aims to produce Euro 5 fuels and polypropylene for the domestic and regional markets.
Existing entries
** Three modular facilities in Nigeria with a combined capacity of 26,000 b/d have “completed construction work and are ready for commissioning”, the country’s industry regulator the Department of Petroleum Resources, or DPR, said April 14. The three modular refineries, currently in the completion stage, are the 6,000 b/d plant in Ikpoba, Edo State, the 10,000 b/d plant in Port Harcourt, Rivers State, and the 10,000 b/d modular refinery Ibigwe, in Imo State. The three facilities were among more than 20 licenses issued by the Nigerian government to private investors, the DPR said, adding that many others were at design and various construction stages.
** Angola’s oil ministry has named the Quantem Consortium, led by US company Quanten, as the winner of the tender to build, open and operate the planned 100,000 b/d Soyo refinery, the country’s ANGOP news agency reported. The ministry delayed naming the company last year due to the coronavirus outbreak. A total of 39 companies have submitted bids, out of which nine were selected for the final round. The ministry will next start negotiations with the winning consortium to sign the investment contract. The refinery was expected to be completed in about three to four years, Platts reported previously. The selected company or joint venture will finance the construction of the plant on a build-operate-transfer basis. The new plant, along with ones under consideration in Lobito in Benguela province and in Cabinda, is part of the government’s plan to transform its downstream sector. That also involves refurbishing the refinery in Luanda.
** The Dangote plant in Lagos, Nigeria — which at 650,000 b/d will be Africa’s largest refinery — is expected to start commissioning January 2022, according to project head Devakumar V G Edwin, an executive director at Dangote Industries. Edwin told Platts on March 1 that overall progress is now 90% complete, including design, engineering, and procurement, with construction work around 70% complete. Edwin said despite delays caused by the coronavirus pandemic in 2020, work has been picking up. “We are targeting for mechanical completion by the end of this year and the commissioning to start in January next year,” he said. Edwin said previously that the refinery would reach full capacity within six months of the start of commissioning. The start-up date for the refinery has been repeatedly delayed, after the company first announced the project in 2013.
** The Ministry of Hydrocarbons of Guinea has signed a memorandum of understanding with logistics firm United Mining Supply, or UMS, to set up the country’s first oil refinery, it said. UMS has said it will carry out a feasibility study to construct a refinery in Moribayah, which is very close to the country’s big mine deposits such as the giant Simandou iron ore project. The West African country is currently fully reliant on imports for its fuel needs, bulk of which comes from neighboring Ivory Coast and Senegal.
** Trinity Energy is in advanced preparations to start building a refinery near the Palouch oil fields in the Upper Nile. Construction was planned to start in the first quarter of 2019, but COVID-19 and electricity power outages delayed it. The construction of the 40,000 b/d refinery near the oil field would avoid costs in transporting crude oil. It would also supply the local market and potentially export to Ethiopia and Sudan.
** The construction of Republic of Congo’s Atlantic Petrochemical Refinery project has begun, the country’s Ministry of Hydrocarbons said in February. “The refinery will produce automotive and aviation gasoline, liquefied petroleum gas, diesel, lubricants, bitumen, kerosene and other products,” Jean-Marc Thystere Tchicaya, the minister of hydrocarbons, said at a ceremony on Feb. 21. The main objective of this refinery is to meet the increasing demand for oil products both in the Republic of Congo and its neighbors. The plant will focus on the output of key refined products such as gasoline, gasoil, LPG, low sulfur fuel oil and jet fuel. Late last year, the government signed a deal with China’s Beijing Fortune Dingsheng Investment Co. Ltd., or BFDI, to construct a 2.5 million mt/year refinery in the port city of Pointe Noire. The Chinese company is also keen on launching a petrochemical complex in the country. The African oil producer currently has only one refinery, the 27,000 b/d CORAF plant, which is also located in Pointe Noire.
** Nigeria commissioned in 2020 the country’s first modular oil refinery, built in Imo state in the restive Niger Delta region, facility operator Waltersmith Petroman Oil said. The commissioning involves the first phase of the refinery with a capacity to refine 5,000 b/d of crude. It would eventually raise capacity to 45,000 b/d. The initial focus of the plant will be on gasoline and diesel. Waltersmith had previously said the plant would eventually try to increase capacity to 50,000 b/d in various phases.
** The Cameroon government is looking to build a new refinery in the southern port city of Kribi after operations at its sole refinery in Limbe were crippled due to a major fire in 2019. In the country’s National Development Strategy, the government outlined plans to create “a viable project for a new and large regional refinery in Kribi” with a capacity of 4 million mt/year. The plant will be built in partnership with private sector, the government said. Kribi has been chosen as the site as it is already home to the country’s main crude export terminal.
** Gemcorp and Sonangol have made the final investment decision (FID) for the construction of a full conversion Cabinda refinery in Angola on the Malembo plain, Gemcorp said Oct. 30. Gemcorp signed a contract with state-owned Sonangol in January to build the 60,000 b/d capacity refinery. The formal site construction commenced in March, Gemcorp said, adding that full site clearance and preparation has been completed in August 2020. Phase 1 is expected to include a 30,000 b/d CDU with a desalter, kerosene treatment and ancillary infrastructures including a conventional buoy mooring system, pipelines, and storage facility for over 1.2 million barrels. It is due to be commissioned in Q1-Q2 2022. Phase 2 and 3 will upgrade the plant to a full conversion refinery with additional 30,000 b/d capacity, a new catalytic reformer, hydrotreater and catalytic cracking unit.
** Uganda expects its new Albertine Graben refinery to be launched in 2024 but in the meantime is exploring options on how to fund its 40% stake in the facility. The Albertine Graben Refinery Consortium, led by Italy’s Saipem, owns the remaining 60% in the refinery. Meanwhile, front-end engineering design work on the project is 70% complete, while the signing of a final investment decision for the new plant is now expected in 2022. An environmental and social impact awareness assessment for the refinery has started, after the government extended the deadline for its completion by an additional 17 months, according to media reports. Following the completion of the assessment, the consortium is expected to sign a final investment decision. The FID was initially planned for 2019, while the completion of the refinery was expected in 2023, Platts previously reported.
** Equatorial Guinea’s 5,000 b/d modular oil refinery project is expected to receive a FID in Q1 2022 , the Ministry of Mines and Hydrocarbons said Sept. 22. The ministry confirmed that a feasibility study undertaken by Houston-based VFuels Oil & Gas Engineering had “concluded satisfactorily”. Earlier, Minister for Mines and Hydrocarbons Gabriel Obiang Lima said he was hoping to build two modular refineries in the country, one at the Punta Europa complex on Bioko Island, and the other at Cogo on the mainland.
** State-owned Nigerian National Petroleum Corp., or NNPC, is close to taking FID with some investors to build a 50,000 b/d condensate refinery. NNPC signed the front-end engineering design for the construction of the plant — which will be in the Niger Delta — with engineering firm KBR. NNPC is partnered in the project by indigenous oil producer Seplat Petroleum. NNPC first announced in August 2018 plans to build a condensate refinery with capacity to refine 200,000 b/d of the condensate oil produced by the country.
** Algerian state-owned Sonatrach expects to commission the Hassi Messaoud refinery in the second half of 2024, a slight delay to the previous timeline, the country’s energy minister Abdelmadjid Attar told Platts. Construction launched at the beginning of 2020, and when complete, the refinery will increase Algeria’s crude oil processing capacity to 31 million mt/year, Attar said. Sonatrach has contracted with Spanish and South Korean consortium Technicas Reunidas-Samsung Engineering to build the new Hassi Messaoud refinery. The consortium had been expected to deliver the refinery in the H1 2024. Attar, a former Sonatrach CEO who was named energy minister in June, said the state company has also finalized front-end engineering and design studies for two projects at the Skikda refinery: a fuel cracker for diesel production and a naphtha processing unit for gasoline production. However, Attar said investment decisions on refinery projects in Biskra and Tiaret would not be made before 2025, as Algeria reviews its long-term energy strategy. Attar’s predecessor, Mohamed Arkab, had announced in June that the Tiaret refinery would be launched in 2022. Hassi Messaoud, Biskra and Tiaret had been part of the government’s 2021-24 oil sector plan, with each refinery intended to have a 5 million mt/year capacity.
** Benin is looking to launch the construction of a new refinery, according to a local media report. The project has been presented at the government meeting. A committee will look at the feasibility studies for the project and will also analyze the market prospects until 2030. The project will be developed as a public-private partnership.
** Africa Finance Corporation, or AFC, has signed an agreement with Brahms Oil Refineries Ltd. to co-develop a refinery and storage terminal in Guinea. The deal means AFC will work on the development and subsequent financing of a petroleum storage and associated refinery project in Kamsar, Guinea. This will include a 12,000 b/d modular refinery, a 76,000 cu m crude oil storage terminal, a 114,200 cu m storage terminal for refined products, and ancillary transportation infrastructure. Guinea currently has no refineries and is entirely dependent on imports from neighboring Ivory Coast and Senegal for its fuel needs.
** Russian state development bank VEB has signed investment cooperation deals with African organizations including on financing a refinery in Morocco. The deals were signed during a Russia-Africa Summit. VEB said the memorandum on the oil refinery in Morocco was signed with the Russian Export Group and Morocco’s MYA Energy, part of the Marita Group. The refinery has a planned capacity of up to 5 million mt/year. Morocco’s sole refiner Samir was forced to halt processing at the Mohammedia plant in 2015 after crude oil deliveries were delayed due to financial problems. Since then attempts to resume operations or find an investor have been unsuccessful.
** Sonaref’s Joaquim de Sousa Fernandes, chairman of the executive council, said that the Lobito refinery in Angola is aimed for completion in 2025. The construction of the Lobito refinery has been frozen due to high costs. Sonangol has been under pressure to build a new refinery as it heavily depends on imports for its fuel requirements, but it canceled the Lobito project in 2016. It has indicated plans for building Lobito have been revived, for a 200,000 b/d plant.
** A consortium of Russian investors is planning a $4 billion project for a new refinery in Northern Zambia at the site of the country’s aging state-owned Indeni plant.
** Russian state-owned exploration company Rosgeologia is considering building the Red Sea Coast refinery in Port Sudan, which would supply landlocked countries in Africa. Sudan had begun discussions to develop a 200,000 b/d refinery on its Red Sea coast. The project’s timeline has not yet been disclosed. The only refinery currently operating in the country is the Khartoum, after the Port Sudan refinery closed in 2013 and was decommissioned.
** Nigeria has reached an agreement with neighbor Niger to build an oil refinery in a border town between Niger and Katsina state in northern Nigeria.
** Kenya is hoping to decide soon on the location for a new refinery in either Lamu or Mombasa.
** Ghana’s ministry of energy is in the process of submitting a proposal to build a new refinery in Tema. It will replace the 45,000 b/d Tema Oil Refinery. Separately, the government has set its sights on building a 150,000 b/d refinery in Takoradi.
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