Downstream Developments Increase Supply
Through the modernization and expansion of existing downstream facilities as well as the buildup of new refinery capacity, Angola is well positioned to become the region’s primary source of petroleum products. Following the modernization and expansion of the Luanda Refinery, Angola’s only operating refinery, from 100,000 tons to 450,000 tons of gasoline per year in 2022, the country has embarked on three new projects aimed at further boosting its refinery capacity to meet both local and regional energy needs while reducing the reliance on imports.
These developments include the construction of the $920 million, 60,000 barrels of oil per day (bpd) Cabinda Refinery which is scheduled for startup in mid-2024; the 200,000 bpd Lobito Refinery which is anticipated to commence operations in 2025; and the $3.5 billion, 100,000 bpd Soyo Refinery which is expected to be completed by the end of 2023 and start producing in 2024. With these new additions, Angola is expected to significantly increase its refining capacity to unlock a new era of regional energy market stability, independence and affordability.
Speaking during a forum in Cape Town earlier this year, Joaquim Kiteculo, Head of Sonangol’s Business Unit, Refining and Petrochemicals (Sonaref), stated that, “These projects will enable us to provide value to stakeholders, power consumers, reduce emissions while shaping regional energy security and economic growth. For Luanda, we finished the construction of new platform units to increase daily production to 1,200 metric tons per day. We are already delivering 1,200 tons of gasoline to the domestic market while ensuring all our projects reduce carbon emissions.”
Infrastructure Connects Angola to the Region
Backed by Angola’s strategic location – which enables the country to supply the regional market via road, pipeline infrastructure and the sea – Angola’s downstream sector has a huge role to play in empowering the country to provide the regional market with energy. In this regard, countries such as Botswana, Zambia, Zimbabwe and the Democratic Republic of Congo have an opportunity to benefit from the country’s energy via pipeline development and use, as well as trucks while South Africa, Namibia and Gabon can tap into the country’s vast resources via sea.
Zambia, for instance, which already has a stake in Angola’s Lobito refinery development, signed in January 2023 a fuel import cooperation agreement with Angola in a bid to strengthen its fuel security. The proposed $5 billion Angola-Zambia Oil Pipeline, which will run from the Lobito Refinery to Lusaka in Zambia, will be a game changer for the country while further positioning Angola as a regional energy hub. As other neighboring countries tap into Angola’s energy supplies via regional connectivity projects, a new era of energy security is in sight for southern Africa.
In addition, Angola’s downstream developments will not only enable the country to meet growing regional energy needs but help the region balance energy security, access and affordability with energy transition demands. With Angola prioritizing emissions reductions from downstream operations, the provision of cleaner fuels in meeting regional energy demand will help southern and central African countries to meet emissions reductions pledges.
Angola Oil & Gas (AOG) 2023 – Angola’s official meeting platform for energy stakeholders, policymakers and investors – will host high-level panel discussions, exhibitions and networking sessions showcasing investment and partnership opportunities across Angola’s burgeoning downstream industry. Keep following Energy Capital & Power’s website and social media channels for more information about this exciting event.