The construction of Angola’s Lobito Refinery – the public tender for which is launching on July 9 – is set to be one of the most transformative projects for sub-Saharan Africa’s second-largest crude producer. Not only will it dramatically boost Angola’s domestic refining capacity, but also create direct and indirect employment opportunities and spur economic development in the surrounding area. Strong forward momentum on the project speaks to the resolute commitment of Sonangol – on behalf of the Angolan Government – to drive downstream diversification and evolve the nation into a truly integrated energy player.

The massive Lobito Refinery has been in the works for over two decades, as the oil giant seeks to boost its refining capacity and reduce associated costs of fuel imports, on which it spent $1.7 billion in 2019 alone. Located on 150 hectares approximately 8-km north of the coastal city of Lobito, the project site is uniquely strategic, boasting extensive port facilities that enables export to the wider region. Upon completion, the refinery will process 200,000 barrels per day of crude oil into high quality gasoline, diesel, jet fuel, illuminant oil and liquefied petroleum gas, among other petroleum derivatives – making it the fourth-largest refinery by volume on the continent. Angola has set its sights on securing 50% of the regional market share – as well as increasing exports to international markets, including the U.S. and Europe – as part of its downstream ambitions. Narrow demand within the domestic market, coupled with limited access to the interior of the country, have made refined exports to the rest of sub-Saharan Africa critical for achieving economies of scale and creating a viable, diversified revenue stream.

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Source: EnergyCapitalReport

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