Angola inks preliminary deal for construction of proposed Lobito refinery

Angola’s state-owned Sonangol EP has signed an MOU with China National Chemical Engineering Co. Ltd. (CNCEC) that could potentially advance its previously delayed plan to build a new 200,000-b/d refinery in Lobito, Benguela Province (OGJ Online, Mar. 17, 2021).

Signed on June 6, the MOU may lead to the signing of an official contract with CNCEC for construction of the long-planned refinery project, Angola’s Ministry of Mineral Resources, Oil and Gas (MIREMPET) said in a release.

Sonangol’s entrance into the MOU falls within the scope of its responsibility to implement and seek financing for the proposed Lobito refinery project, over which the state-owned company resumed sole control in 2022 following delays to a July 2021-launched tender seeking a financial partner, according to MIREMPET and Sonangol’s 2022 annual consolidated statements made available in June 2023.

Neither MIREMPET nor Sonangol revealed an estimated timeframe for when a formal contract with CNCEC might be finalized.

Lobito refinery development

One of several strategic downstream developments under President Lourenço’s national plan to increase domestic crude processing capacity to help reduce the country’s dependence on refined products imports, encourage increased foreign investment, and create employment opportunities for Angolans, the Lobito refinery project was restarted for development in 2017 following Lourenço’s election after its 2016 suspension under the previous administration (OGJ Online, Dec. 3, 2018).

In its 2022 consolidated statements, Sonangol said it completed an update to an earlier-executed front-end engineering design (FEED) study for the refinery, which will be built on 3,800 hectares about 8 km northwest of Lobito. Ongoing FEED update works include:

Preparation of technical deliverables and definition of the proposed refinery’s 3D model.
Preparation of the project’s early-FEED book.
Preparation of an official preliminary project cost estimate.
Preparation of the invitation-to-bid package for a main EPC contractor.
Analysis, approval of unidentified technical documents prepared by KBR Inc.
Completion, issuance of a final FEED update package.

During 2022, Sonangol also confirmed it began unidentified structural works at the proposed refinery’s site, as well as signed contracts with OECI SA (formerly known as Odebrecht Engenharia e Construção Internacional SA) and Dar Al-Handasah Consultants Shair and Partners Holdings Ltd. (Dar Group) for preliminary engineering, procurement, and construction (EPC) works.

Sonangol said in its recently released 2022 consolidated report that it remains open to evaluating possible participation in the project by third-party investors. MIREMPET indicated in a June 2022 release that the operator would continue development of the refinery with or without a partner.