Angola's First New Refinery in 50 Years Starts Production

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

More than 50 years after achieving its independence from Portugal, Angola has shipped fuel from its newest refinery at Cabinda.

Refining Lifeline for Angola

Angola's first new refinery in more than 50 years, Cabinda, has started shipping its first fuels. Located in the northwestern tip of the country, the refinery has an initial capacity of 30,000 barrels per day (bpd) and is majority-owned by London-based emerging markets investment firm Gemcorp (90%) and Angola's state-owned oil firm Sonangol (10%). It is the country's second refinery in addition to  Sonangol's Luanda refinery and is now producing diesel for the local market as well as naphtha and heavy fuel oil to international buyers. The refinery's first phase cost an estimated US$470 million to build since its  inception in 2019 and is expected to supply around 10% of Angola's fuel needs. Gemcorp and partners are also looking to expand the refinery by another 30,000 bpd in the coming years and there's talk that a petrochemicals plant may follow. According to Industrial Info Resources data, there are 12 active projects at Cabinda worth US$1.4 billion in investment. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports. 

Reasons for Cabinda

Angola exports 90% of its own crude oil and is heavily reliant on imported refined products for more than three quarters of its needs due to having--until now--just one refinery. When Cabinda was inaugurated late last year, the Minister of Mineral Resources, Petroleum and Gas Diamantino Pedro Azevedo stated: "The Cabinda Refinery is a structuring project for Angola's energy sovereignty, which guarantees greater added value to national crude oil, reduces dependence on costly imports and creates skilled jobs. This investment strengthens international confidence in the country and responds to the strategic priorities of the government."

According to founder and Gemcorp Capital Chief Executive Officer Atanas Bostandjiev in a recent interview, having people on the ground in the years before the project started helped it understand the reality "which you normally don't get to realize when you are outside of the country." The project site was described as "bush," with no infrastructure, and which was littered with unexploded landmines. "We understood that Angola had an energy security problem. You have the second largest crude oil producer on the African continent that is still operating and servicing its oil product needs with one refinery that barely meets its needs. Cabinda Refinery is located in the most strategic energy province of the country...which hosts the majority of oil production in Angola."

Speaking about Phase 2, Marcus Weyll, chief executive officer of Cabinda Refinery operator Imbono, added: "We are already investing in phase two. US$8 million has been invested in phase two to get us started. We're going to launch the FEED (Front-End Engineering Design) this year and then we will have the EPC (Engineering, Procurement, and Construction)."

Lobito

Industrial Info also is tracking 18 projects worth US$2.7 billion at the under-development Lobito refinery project on the west coast of the country. The much larger 200,000-bpd project is being led by state-owned Sonangol and has an estimated startup date of 2027. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports.

Key Takeaways

• Angola's first new refinery in more than 50 years, Cabinda, has started shipping its first fuels.
• The refinery has a capacity of 30,000 bpd now but a second phase is underway to double the capacity to 60,000 bpd. 
• Industrial Info is tracking 12 active projects at Cabinda worth US$1.4 billion in investment. 

About Industrial Info Resources

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).