Angola's New $1bn Cabinda Refinery Set to Compete With Dangote in 2024
- The Cabinda refinery in Angola is set to begin operation by next year
- The Angolan refinery will produce at capacity of 60,000 b/d
- The $1 billion refinery project is one of three new refineries planned for Angola
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The first phase of the Cabinda refinery, located in Angola, is expected to come on board by the end of 2024.
Anibor Kragha, Executive Secretary of the African Refiners and Distributors Association (ARDA), disclosed this in a conversation with S&P Global Commodity Insights.
Source: UGC
The Cabinda refinery project is one of three new refineries planned for Africa's second-largest crude oil producer to lessen its reliance on importing nearly all of its domestic refined product needs, according to Reuters.
According to Kragha, the Dangote refinery in Nigeria, with a planned capacity of 650,000 barrels per day, and Cabinda in Angola, with a capacity of 60,000 barrels per day, are two of the main refining projects expected to start soon
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Kragha predicted that phase one of the Cabinda refinery would be operational by the end of 2024, and phase one of the Dangote refinery would start in the first quarter of 2024.
He said it would undoubtedly benefit the continent's energy security since "we would reduce the imports to the continent, but we still need more refining capacity."
Legit.ng had reported that the newly commissioned Dangote refinery failed to take off as expected as Nigeria continues to depend on imported petrol.
Nigeria, and others remain significant importers of refined products
Due to the lack of new refining projects on the continent, Kragha predicted that volume-consuming countries like Nigeria and other African countries will continue to be big importers of refined products shortly.
He stated:
"We're still going to have a shortfall because our demand in Africa is going to grow so much."
According to Kragha, ARDA also backed other initiatives, such as restoring the Tema refinery in Ghana to improve regional supply security.
According to S&P Global Commodities at Sea data, the total amount of refined products imported into Africa has remained steady at about 2.3 million b/d in recent months.
Beyond refining capacity, according to Kragha, a strategic conversation on storage and distribution assets in Africa is required, as well as which projects should receive funding.
“As a perfect example, if you have a deepwater port in Africa that is 14 meters depth or larger, you save $15/mt on importing products because you can bring larger vessels in. When you start to look at countries like Nigeria with huge imports you start to see where you can make savings,”
He cited the South African refineries closing when neighboring Namibia found significant crude reserves as an example of challenges that need to be addressed in discussions about strategy.
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Refiners and governments must deal with market uncertainty in Africa, he said.
Subsidy Removal in Nigeria
Nigeria's domestic petrol prices recently increased dramatically due to the withdrawal of expensive subsidies on imported petrol.
According to Kragha, the elimination of the subsidy means that it is now apparent what Nigeria's actual gasoline usage is, putting an end to a thriving black market for petrol in adjacent nations like Togo, Benin, and Niger, where shady companies purportedly supplied subsidized Nigerian petroleum.
“There was incentive arbitrage given that the pricing in Nigeria was significantly lower than in neighboring countries. Now that it’s normalized neighboring markets are having to face the reality that there’s no cheap fuel supply anywhere,” he said.
After launching Dangote Refinery, Africa's richest billionaire set to unveil Dangote Foods
Ravindra Singhvi, Group Managing Director and Chief Executive Officer of Dangote Sugar Refinery Plc, earlier disclosed that three of its subsidiaries will be merged to form one big company.
He said subject to regulatory approvals, the proposed merger of Dangote Sugar Refinery Plc (DSR), NASCON Allied Industries Plc, and Dangote Rice Limited would be completed before the end of 2023.
Dangote Foods Plc will be the name of the mega-entity that will result from the proposed merger of companies of Dangote Industries Limited, two of which are already listed on the Nigerian stock market.
Source: Legit.ng
