Despite holding over 620 trillion cubic feet of gas and 125 billion barrels of oil, the bulk of the African continent’s resources are still being exported, with the majority of African countries primarily relying on refined product imports to sustain domestic economies.
This trend has left the continent highly susceptible to volatile market prices and unreliable suppliers, directly impacting energy security.
To address this, African governments from across the continent have placed downstream developments at the forefront of their agenda’s, launching a number of refinery projects to improve energy security and independence for 2022 and beyond.
Dangote Oil Refinery: 650,000 bpd
Located in the Lekki Free Zone near Lagos, Nigeria, the 650,000 barrel per day (bpd) Dangote Refinery is Africa’s largest oil refinery, as well as the world’s largest single-train facility. Launched in 2022, the fully integrated refinery is currently under construction and is expected to meet 100% of the country’s refined product needs, with surplus. The mega facility is expected to create a market for upwards of $11 billion per year in Nigerian crude, while creating significant opportunities for local communities through job creation and energy security. Currently, the oil refinery is on track for first production by Q4 this year, following the completion of tests at the facility. The facility is owned by the Dangote Oil Refinery Company, with the Nigerian National Petroleum Corporation holding a 20% share as of August 2021.
Lobito Refinery: 200,000 bpd
Angola’s national oil company (NOC), Sonangol, is making headway with its Lobito oil refinery, located in Lobito in the Benguela province. The refinery – which will be 70% owned by private investors and 30% by Sonangol – will have the capacity to refine up to 200,000 bpd and is scheduled to start refining in 2025. Despite initial project proposals from as early as January 1998, development has been slow. However, last year Sonangol issued a tender for the refinery, with a number of private and public sector players, including the Zambian government, relaying interest. With Angola looking at eliminating refined product imports by improving domestic refining capacity, the Lobito refinery will be instrumental.
Soyo Oil Refinery: 100,000 bpd
Sonangol is also launching a refinery in Soyo in the Zaire province of Angola. Dubbed the Soyo Refinery, the 100,000-bpd facility will represent the third largest in the country with a total investment of $3.5 million from the Quantem consortium – comprising American companies TGT, Quantem, Aurum & Sharp and Angolan company, Atis-Nebest. In May 2022, the first stone for the Soyo Refinery was laid with construction expected to commence either this year or in early 2023. First production is planned for 2024, with the American developers stating that the project remains on track.
Tiaret Refinery: 100,000 bpd
In north Africa, Algeria’s NOC, Sonatrach, launched the Tiaret Refinery this year—a 100,000-bpd facility that aims to significantly improve the country’s refining capacity. The non-integrated refinery will be built at Tiaret in Algeria and will be owned and operated by Sonatrach. During the period 2021-2025, the facility is expected to see an estimated capital expenditure of approximately $200 million.
Hassi Messaoud: 100,000 bpd
Located in the Ouargla province in Algeria, the Hassi Messaoud crude oil refinery has capacity to refine 100,000 bpd. With an estimated investment of $3.68 billion, the refinery will be owned and operated by the country’s NOC, Sonatrach. Scheduled to be completed by 2024, the refinery aims to meet both domestic and European market demand, producing hydrocarbon derivatives including gas, oil and gasoline, together with butane and propane gas. The construction of the refinery will be undertaken by a joint venture comprising Korean-based, Samsung Engineering with a 45% stake and Spanish-based, Técnicas Reunidas with 55%.
