China National Chemical Engineering to Build $6B Refinery in Angola

On 20 October 2023, the China National Chemical Engineering Company (CNCEC) signed a contract with Sonangol to build a refinery in the port city of Lobito, Angola. The project cost is estimated at USD 6 billion and the refinery will have a capacity of 200,000 barrels per day.

The refinery project has been several years in the making with the project taking many twists and turns. Prior to this contract signing, a preliminary MoU was first signed between the Parties on 6 June 2023. The tender for the project itself was launched back in July 2021.

Signing Ceremony Between Sonangol and CNCEC

However, the plan to set up the Lobito Refinery in Angola goes back further. Indeed, the motivations for such a project are clear: it will cut dependence on foreign imports, save on foreign currency reserves, create local jobs and enhance local value addition (#LVA).

Unfortunately, the project was put in the freezer in 2016 by the previous administration. Then, when current President Joao Lourenco came into power in 2017, he reactivated the project and promoted it as a flagship project under his new National Development Plan (#NDP).

According to the Annual Report 2022 released by Sonangol, it has completed the Front-End Engineering Design (FEED) for the refinery. A plot of land covering 3,800 hectares about 8 km northwest of Lobito in Benguela province has been earmarked as the site for the refinery. Sonangol contracted Odebrecht Engenharia e Construcao Interncional (OECI) and Dar Al-Handasah Group as consultants to assist in project development and prepare the necessary technical and procurement documents.

Angolan President Joao LOURENCO and CNCEC CEO WANG Gang

The Lobito refinery is expected to become online by 2026. In addition to the Lobito Refinery, Angola has other refineries in the pipeline and aims to increase the refining capacity from the current 65,000 barrels per day to 425,000 barrels per day. For instance, the Cabinda Refinery with a capacity of 60,000 barrels per day will become operational by the end of 2023.

Currently, Angola consumes about 140,000 barrels a day while its extraction capacity is over one million barrels a day. After satisfying the domestic market, Angola ambitions to export the refined petroleum to the regional market, targeting Zambia, Congo-Kinshasa and Congo-Brazzaville.