As hydrocarbon exploration ramps up in many resource-rich basins across Africa, countries are turning towards downstream developments to increase domestic production capacity, reduce refined product imports, and maximize the benefits of Africa’s significant oil and gas resources. Major downstream developments and project upgrades in the coming years are set to position Africa as a global refined product exporter while increasing domestic capacity and boosting socioeconomic development through energy independence.
Nigeria
Due to come on stream in Q1 2024, the Dangote Refinery – situated in the Lekki Free Zone near Lagos, Nigeria – received its sixth crude oil shipment of one million barrels from global energy company, the Nigerian National Petroleum Corporation. Serving as Arica’s largest oil refinery, the 650,000-barrel-per-day (bpd) facility is expected to meet 100% of the country’s refined product needs upon completion. With the recent shipment, the Dangote Refinery has so far received six million barrels of crude, having received its maiden shipment of one million barrels in December 2023. The refinery is expected to begin test runs as early as this week.
Meanwhile, Nigeria’s government announced in August 2023 its plans to restart four of its oil refineries by the end of 2024, which boast a combined capacity to process approximately 4.45 million bpd. The country’s Port Harcourt Refinery is currently undergoing a $1.5 billion upgrade by Italian engineering company, Maire Technimont – which is due for completion in 2024 – and expects to complete a test run in January 2024. Refining facilities near the cities of Warri and Kaduna are also slated to commence crude processing during 2024.
Angola
In October 2023, Angola’s National Oil Company (NOC) Sonangol and construction and engineering company, China National Chemical Engineering Company, signed a contract for the construction of the 200,000-bpd Lobito Refinery, which will be situated in the country’s Benguela Province. Serving as one of sub-Saharan Africa’s largest oil producers, development of the Lobito Refinery – which is slated for completion in 2025 – is poised to reduce Angola’s dependence on refined product imports, particularly gasoline and diesel.
Meanwhile, scheduled for completion in 2025, the Soyo Refinery project has received a total investment of $3.5 million from the Quantem Consortium – comprising American companies TGT, Quantem and Aurum & Sharp, and Angolan company Atis-Nebest. Designed with the capacity to process 150,000 bpd, the Soyo Refinery will be situated in the Zaire Province of Angola and will serve as the third-largest refinery in the country upon completion.
In October 2023, the Fund for Export Development in Africa – an investment subsidiary of the Afreximbank – announced an investment into the Cabinda Oil Refinery. While the exact amount was not disclosed during the announcement, the 60,000-bpd refinery is expected to cost up to $1 billion upon completion in mid-2024 and is poised to cater for up to 20% of Angola’s domestic oil demand.
Algeria
Serving as part of Algeria’s 2021-2024 oil sector plan, the initial launch date for the 100,000-bpd Tiaret Refinery was delayed from 2022 to 2025. Poised to significantly improve the country’s refining capacity, the refinery will be owned and operated by the country’s NOC, Sonatrach, and is expected to reach an estimated capital expenditure of approximately $200 million.
Meanwhile, located in the Ouargla Province, the 112,000-bpd Hassi Messaoud crude oil refinery is scheduled for completion in 2024, and is poised to meet both domestic and European market demand for refined crude oil products. Construction of the refinery is being undertaken by a joint venture comprising construction and project management company, Samsung Engineering (45%), and engineering, procurement, and construction company, Técnicas Reunidas (55%).
Ghana
Set to double Ghana’s refining capacity, Phase 2 of the 120,000-bpd Sentuo Oil Refinery is set for completion in January 2024 and will operate at a capacity of approximately 5 million tons per year. Situated in the Tema Industrial Zone, the three-train multi-product crude oil refinery is set to result in the direct employment of approximately 900 people while significantly reducing the West African country’s reliance on imported gasoline and diesel supplies. In November 2023, the country commissioned the interconnected pipeline to the refinery, with first gas flowing from the Tema Regulating & Metering Station.
