Gemcorp, an emerging markets trade and investment group, has completed the preliminary stage of constructing the Cabinda Oil Refinery project in Angola, comprising:
- Completion of de-mining, land clearance, and site preparation for 38 hectares of land.
- Completion of ISBL (Inside Battery Limits – Refinery Crude Distillation Unit and Merox Unit) FEED (Front End Engineering and Design).
- Completion of OSBL (Outside Battery Limits – tanks, supporting infrastructure, and power) FEED.
- Initial design of the export facility’s CBM (Conventional Buoy Mooring System) and receipt of the CBM license, which is an addition to the original scope and will allow large vessels to service the refinery*. This aspect increased the Phase One investment amount by USD 30 million.
The Cabinda Refinery represents a key pillar of the Angolan government’s strategy to develop its refining and transportation (midstream) sector. Currently the vast majority of the crude oil produced by the country is exported, with refined product subsequently imported from Europe or further afield costing Angola precious dollars. Building the new refinery will substitute the need for these expensive imports, create jobs and boost exports of surplus higher margin refined products, particularly to regional markets that will benefit from faster delivery.
Gemcorp signed a joint-venture shareholder agreement in January 2020 with Sonaref, a subsidiary of Sonangol, to build the Cabinda Refinery. Sonangol is the Angolan government’s state-owned oil & gas production company. The refinery is being built on the Malembo plain, about 30 kilometres north of Cabinda’s capital. A Final Investment Decision is likely to be declared by 30 June 2020 with formal site construction to begin in August 2020.
Gemcorp is on track to achieve its commitment to deliver Phase One of the Cabinda Refinery which consists of 30,000 barrels per day (b/d) by late 2021. Phase Two will increase refining capacity to 60,000 b/d and also include a reformer to convert straight run naphtha to gasoline. The third, and final, phase will complete full refinery conversion via the addition of a hydrocracker to convert heavy fuel oil into gas oil/diesel. This is expected to be delivered by the end of 2023. The first priority and preference for distribution of white products (diesel, gasoline, Jet A1, and naphtha) will be for domestic consumption.
The Cabinda Refinery is Gemcorp’s second investment into midstream refining capacity in Africa.
Reginald Crawford, Partner at Gemcorp Capital LLP, said:
“We’re working closely with domestic and international contractors, and are pleased to be on track with the delivery of this important project. Once in operation, the Cabinda Refinery will create significant value for the Angolan economy and in particular reduce its dependence on foreign energy imports.”
* The Export Facilities License was received on 15 May 2020. The scope includes 3 export lines, 1 reversible for crude import as necessary. The CBM can accommodate up to a Suez Max vessel.