Angolan refinery completion delayed until 2014-2015

Angola's oil minister, Jose Maria Botelho de Vasconcelos, has announced that the start-up date of the planned 200,000 bpd Lobito refinery has been put back from 2012, to 2014 or 2015. Speaking at the Organisation of Petroleum Exporting Countries (OPEC) conference in Luanda on December 22, the minister commented that the delay to the project was a result of the global recession.
"The Lobito refinery will be affected by the downturn; it will happen, but at a slower pace," de Vasconcelos commented.

At present, Angola only has one operational oil refinery. The 60,000 bpd facility in Luanda is both owned and operated by state-backed oil company Sonangol. The firm took full ownership of the refinery when it acquired Fina Petroleos de Angola's, a subsidiary of French oil major Total, 61 % stake back in 2007.
The refinery processes local crudes, mainly from the nearby Kwanza and Palanca fields, with most refined products output going to the domestic market. However, surplus fuel oil, gas oil andjet oil are exported to neighbouring African countries. The Luanda refinery does not produce enough gasoline to meet Angolan demand, however, so the country currently has to import around 31,000 bpd of refined products.

To rebalance this equation, Angola developed plans for the construction of the new 200,000 bpd refinery, in the coastal city of Lobito -- located around 400 km south of the capital city. The proposal was initially approved by the Angolan government back in 1997.
The refinery was to have been built in partnership with Sinopec, but the Chinese refiner withdrew in 2007 as a result of disagreements regarding the marketing of the facility's products. To fill this void, in December of last year, US-based services provider KBR was awarded a contract to build the refinery. Subsequently, work began in January of 2009 on the $ 8 bn plant.

The new refinery is designed to process heavy crudes, such as those found in the Kuito and Dalia fields. Once operational, it will allow Angola to eliminate its high level of gasoline imports and boost refined products export capacity, thereby realising additional value from its oil resources.
As a result of the announcement that the new refinery start-up date has been pushed back, Angola will remain dependent on refined product imports until 2014 at the earliest.