State-owned Sonangol EP and partner Gemcorp Holdings Ltd. of the UK have received necessary funding to proceed with their previously announced plan to build a grassroots modular refinery on Angola’s Malembo plain, 30 km north of Cabinda (OGJ Online, May 4, 2022).
On July 13, 2023, the proposed Cabinda oil refinery project received a $335-million project financing facility led by Africa Finance Corp. and African Export-Import Bank, as well as a consortium of lenders including the Industrial Development Corp. of South Africa, the Arab Bank for the Economic Development in Africa, and Banco de Fomento Angola, Gemcorp said in a release.
The newly awarded funding covers and paves the way for construction of the first 30,000-b/d phase of the $473-million project, for which project sponsors Gemcorp (90%) and Sonangol (10%) have already provided $138 million of equity, the majority shareholder said.
Gemcorp also confirmed it will proceed with the planned Cabinda refinery’s second phase, which will boost crude processing capacity another 30,000 b/d to 60,000 b/d. Completion of Phase 1 will satisfy about 10% of Angola’s total demand for refined oil products, increasing to 20% with Phase 2.
In an update on the project’s status, the Cabinda refinery project partners said that, to date, there have been 300,000 hours of training completed for upskilling of local employees, with 1 million injury-free hours worked on building activities.
Commencing initial construction in 2020, the Cabinda refinery’s first phase will include a crude distillation unit (CDU), desalinator, kerosine treating unit, and auxiliary infrastructure, as well as a conventional float anchoring system, pipelines, and a more than 1.2-million bbl storage terminal. Alongside another CDU, Phase 2 of the project will add units for catalytic reforming, hydrotreating, and catalytic cracking that will transform the site into a full-conversion refinery (OGJ Online, May 3, 2021).
As of early 2023, Phase 1 construction—including work on the CDU, which will be Africa’s first not to burn gas during operation—had reached 30% completion, with initial test runs at the site slated for mid-December 2023, Sonangol said in a Feb. 6, 2023, release.
The first private investment of its kind in Angola, the Cabinda refinery aligns with the Angolan government’s main strategic objectives of increasing domestic crude processing capacity for Angolan-produced oil to help considerably reduce the country’s dependence on expensive imports of refined products, encourage increased foreign investment, create employment opportunities for Angolans, and ensure the country’s long-term energy security, said Atanas Bostandjiev, Gemcorp’s chief executive officer.
A revised timeline for the refinery’s Phase 1 startup date has yet to be revealed.
