REFINERY NEWS ROUNDUP: Some of Libya's refineries resume, Ras Lanuf remains offline

London — Some of Libya's refineries have resumed operations recently as the country's crude oil output has started to rise following the lifting of an oil blockade, industry sources said.

The country's 120,000 b/d Zawiya oil refinery restarted operations on Oct. 20, according to state-owned National Oil Corporation. The two smaller refineries in the East -- the 20,000 b/d Tobruk and 10,000 b/d Sarir -- also restarted recently, sources at NOC subsidiary Arabian Gulf Oil Company said. The 220,000 b/d Ras Lanuf remained offline without any timeline for restart. The refinery has been closed since 2013 due to an arbitration dispute.

Demand for oil products in Africa will recover in 2021 after being hit hard by measures to contain the spread of COVID-19, though the impact has differed across the continent, according to Africa-focused oil consultancy CITAC.

Egypt -- the hardest hit in North Africa -- has "bounced back very quickly", CITAC analysts said during the virtual African Donwstream Webinar. After the end of its lockdown, Egyptian demand was back to its pre-coronavirus level, apart from jet fuel.

Refineries in North Africa have continued to operate despite the demand slump, and new investments continue, according to CITAC. With the ERC refinery having launched its new hydrocracker in December, the Assiut refinery's gasoline complex is due online by the end of this year.

Demand in Central and West Africa has been relatively unaffected by the coronavirus, with Nigeria's gasoline demand expected to end the year down 2%-3%, while gasoil demand will be higher year on year.

Jet fuel demand, the hardest hit across Africa, has started to recover as initially domestic flights, and more recently international flights, have resumed.

Demand for LPG has surged, with people cooking more meals at home, with the US seen as taking a growing share of LPG supply.

But the year has been challenging in terms of refinery output, resulting in run cuts as well as delays to the Dangote refinery, with the timeline for it launch still uncertain. That will ensure West African product imports will continue for years to come, providing a boost for exporters.

The Dangote refinery complex will likely launch trading operations within the next calendar year, depending on the COVID situation, according to CITAC. That will likely bring forth heightened competition for trading companies into West Africa, with more options for big producers.

Meanwhile, southern Africa has been one of the hardest hit by the pandemic measures, especially South Africa where refinery output was expected to contract by 28% in 2020.

Four of the country's refineries closed and, while three have reopened, Astron's Cape Town refinery remained offline due to an incident during its start-up after maintenance. It was expected to remain closed throughout next year, according to CITAC.

Overall demand in East Africa, where Kenya and Uganda were the worst affected by lockdowns, was expected to drop 8.7% in 2020 but recover to pre-coronavirus levels by the second quarter of 2021.

Key for imports to East Africa is what happens with the launch of Saudi Arabia's Jizan refineries, which would put pressure on longer-haul refineries as sources of import barrels, according to CITAC.

In other news, Midor exported 18,974 mt of jet fuel from its 115,000 b/d refinery in Alexandria in September, after skipping exports in August, latest company data showed. There were no exports of other oil products by the refinery in September.

ONGOING MAINTENANCE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

** Libya's Zawiya oil refinery restarted operations on Oct. 20, according to state-owned National Oil Corporation. The two smaller refineries in the East -– the 20,000 b/d Tobruk and 10,000 b/d Sarir -– also restarted recently, sources at NOC subsidiary Arabian Gulf Oil Company said.

** South Africa's Astron Energy Cape Town refinery remains shut amid ongoing investigations regarding two incidents at the plant, even as domestic demand for motor fuel continues to trend higher, industry sources with knowledge of the matter told S&P Global Platts. The first incident involved an explosion and fire at the plant that occurred early morning July 2 and subsequently forced operations at the 110,000 b/d facility to be suspended, Platts reported earlier. The second involved a "product spill that occurred on a section of the transfer pipeline between the Milnerton Refinery and Acacia Park," the company had said in a statement on its website Sept. 22. "I don't think the refinery will be back up soon. The investigation for the first problem has not even completed and now there was the second problem," one industry source based in the Middle East said. According to Astron Energy "it remains too early to determine" when it can safely restart.

Existing entries

** Zambia's Indeni refinery, which has remained closed for over two months, is still awaiting crude, a spokesman from the plant said Oct. 20. A crude or feedstock shipment is expected to be delivered to the refinery in the next one or two weeks, after which operations will resume, he said. The 1970s-built refinery needs rehabilitation, and the government has been looking to sell it to private investors. Five companies had been shortlisted but the process was stalled as a result of the coronavirus pandemic.

** Nigeria plans to kick-start the upgrade program of its four dilapidated refineries in 2021 after the coronavirus pandemic delayed repair works, the head of state-owned Nigerian National Petroleum Corporation said Oct. 6. Mele Kyari, NNPC's group managing director, confirmed that the financing deals, and the engineering, procurement and construction (EPC) contracts for the refinery rehabilitation program are being ironed out. Kyari said repair works at the refineries in Port Harcourt are scheduled to begin early next year followed by repairs at the Warri and Kaduna plants. The rehabilitation program could take around 18-24 months, he added. NNPC, which manages the refineries, first shut the two refineries in Port Harcourt in March 2019 after it secured the service of Italy's Maire Tecnimont to handle the overhaul of the facilities, with oil major Eni appointed as technical adviser. The Warri and Kaduna refineries were shut in December last year.

** Sudan's Khartoum refinery has postponed its planned maintenance to December, CITAC Africa reported. It was previously set to carry out works from around mid-September.

** Ghana's sole oil refinery Tema CDU currently only has one furnace and was until recently operating near the 25,000-30,000 b/d level. The residual fluid catalytic cracker has been down for a few months. The plant has been hit by several issues over the past few years, experiencing intermittent outages at its CDU and FCC units.

** The refinery in Pointe Noire, Republic of Congo, will go into turnaround in 2021, but dates have not been finalized.

** Cameroon's Limbe refinery, which suffered from a fire at the end of May 2019, remains offline, according to sources. Local media reported the restart is not expected until 2021. During a Russia-Africa summit officials said that Russian companies could get involved in the reconstruction of the plant.

** Libya's Ras Lanuf remains offline without any timeline for its restart. The refinery was shut in 2013.

Upgrades

Existing entries

** The European Bank for Reconstruction and Development has recently reviewed a provision of up to $250 million sovereign loan to the Alexandria Petroleum Company to finance resources and energy efficiency investments and other modernization investments. The project, which is estimated at $647 million, aims to improve the refinery's efficiency while enhancing its productivity from increasing its output of Euro 5 diesel. It includes the installation of a new vapor recovery unit, continuous emissions monitoring system and a burner management system. Currently there is environmental and social due diligence ongoing, the EBRD said, adding that the status of the project will be updated once the due diligence is completed. The expansion program at Egypt's state-owned Middle East Oil Refinery near Alexandria, is on track for 2022, which will push capacity to 160,000 b/d. Once the revamp is complete, the refinery will produce Euro 5 specification refined products, S&P Global Platts has reported previously.

** TechnipFMC said it has signed an engineering, procurement and construction contract for a new hydrocracker at Egypt's Assiut refinery. The contract includes process units such as vacuum distillation, diesel hydrocracker, delayed coker, distillate hydrotreater and a hydrogen production facility, as well as interconnection. It will transform lower value products into approximately 2.8 million mt/year of cleaner products, such as Euro 5 diesel. Egypt is in the process of upgrading its refineries. The upgrade at Assiut includes the installation of 880,000 mt/year continuous catalytic reforming and isomerization complex, a 400,000 mt/year vapor recovery unit and 2.3 million mt/year hydrocracker, Platts has reported previously.

** The European Bank for Reconstruction and Development approved a $50 million loan for an upgrade of Egypt's Suez refinery aimed at introducing cleaner fuel and reducing CO2 emissions. It was the second loan by EBRD, which aims to "increase the flexibility of the plant's crude intake and allow for the production of higher quality fuels and lower sulfur fuels." ** Italy's Kinetics Technology has been awarded a contract to build a fluid catalytic cracker at Angola's sole oil refinery in Luanda. The unit would take around two-and-a-half years to complete. Sonangol is working with Eni for the refurbishment of the Luanda plant. The construction of the fluid catalytic cracker at the Luanda refinery will enable it to produce 1,200 mt/day of gasoline, up from current output of 380 mt/day. The unit is expected to come online mid-2021.

** Cote d'Ivoire's SIR has secured a Eur577 million ($657 million) debt financing deal from Africa Finance Corporation, or AFC, which will help fund the upgrade of the refinery.

** Senegal's Dakar refinery is planning to increase capacity to 1.5 million mt/year.

Launches

New and revised entries

** Nigeria's first modular oil refinery, built in Imo state located in the restive Niger Delta region, is ready for operations, Nigeria's oil industry regulator, the Department of Petroleum Resources, said Oct. 27. "We can confirm that the refinery is very much ready to commence operations. We have seen all the preparations," said Sarki Auwalu, DPR's Director. "The commissioning is just symbolic. [It] is ready to start off." The refinery's owners -- Waltersmith Petroman Oil and Nigerian Content Development and Monitoring Board -- had confirmed that all work at the site had been completed. The crude supply for the refinery phase will come from Waltersmith's upstream business with back-up from nearby third-party crude, the statement said. Waltersmith is the operator of the Ibigwe field which is part of OML 16, located in Imo State. The refinery has a crude oil storage capacity of 60,000 barrels and is projected to deliver over 271 million liters/year of refined petroleum products. Waltersmith Petroman Oil had previously said the plant would eventually try to increase capacity to 50,000 b/d in various phases.

** Gemcorp and Sonangol have made the final investment decision (FID) for the construction of a full conversion Cabinda refinery in Angola on the Malembo plain, Gemcorp said Oct. 30. Gemcorp signed a contract with state-owned Sonangol in January to build the 60,000 b/d capacity refinery. The formal site construction commenced in March, Gemcorp said, adding that full site clearance and preparation has been completed in August 2020. Phase 1 is expected to include a 30,000 b/d CDU with a desalter, kerosene treatment and ancillary infrastructures including a conventional buoy mooring system, pipelines and storage facility for over 1.2 million barrels. It is due to be commissioned in Q1-Q2 2022. Phase 2 and 3 will upgrade the plant to a full conversion refinery with additional 30,000 b/d capacity, a new catalytic reformer, hydrotreater and catalytic cracking unit.

Existing entries

** The 650,000 b/d Dangote refinery in Lagos, Nigeria -- set to be Africa's largest -- is "more than 70% complete," an official from Dangote Industries said Oct. 7. Speaking at the virtual African Refiners' Association event, Babajide A. Soyode, who works as a technical consultant for the refinery, said work was progressing "very well" though he conceded the coronavirus pandemic had led to some delays. Soyode, however, refused to give a specific start-up date for the refinery. Last month, Nigeria-based industry sources told S&P Global Platts that the refinery was unlikely to come in stream until 2022 due to delays caused by the pandemic. The start-up date of this refinery has been repeatedly delayed, after the company first announced the project in 2013. Soyode said the plant was initially planning to run a mixture of crudes with a focus on Nigerian light sweet grades. He said the crude distillation unit had been designed to process 12 crudes at one time and had been engineered to process three Nigerian crude grades such as Escravos, Bonny Light and Forcados. But he said the plant would focus on using a wide array and quality of crudes. The plant will yield 327,000 b/d of gasoline, 244,000 b/d of gasoil/diesel, 56,000 b/d of jet fuel/kerosene as well as 290,000 mt a year of propane/LPG when fully operational, Soyode added. It will also produce 830,000 mt/year of polypropylene, 600,000 mt/year of slurry, 290,000 mt/year of propane and 38,000 mt/year of sulfur.

** South Sudanese company Trinity Energy, a distributor of oil products, plans to build a new refinery in the north east of South Sudan near the oil field Paloch, according to media reports. The construction of the 40,000 b/d refinery in close proximity to the oil field would avoid the cost for transporting crude oil. It would also supply the local market and potentially export to Ethiopia and Sudan.

** Uganda expects its new Albertine Graben refinery to be launched in 2024 but in the meantime is exploring options on how to fund its 40% stake in the facility. The Albertine Graben Refinery Consortium, led by Italy's Saipem, owns the remaining 60% in the refinery. The government is looking at various options, including its consolidated fund, the Export Credit Agencies and commercial banks, according to the minister of energy and mineral development, Goretti Kitutu. The government funding is estimated at $500 million. Meanwhile, front-end engineering design work on the project is 70% complete, while the signing of a final investment decision for the new plant is now expected in 2022, Kitutu said. Meanwhile, an environmental and social impact awareness assessment for the refinery has started, after the government extended the deadline for its completion by an additional 17 months, according to media reports. Following the completion of the assessment, the consortium is expected to sign a final investment decision. The FID was initially planned for 2019, while the completion of the refinery was expected in 2023, S&P Global Platts has previously reported.

** Equatorial Guinea's 5,000 b/d modular oil refinery project is expected to receive a final investment decision in the first quarter of next year, the Ministry of Mines and Hydrocarbons said Sept. 22. The ministry confirmed that a feasibility study undertaken by Houston-based VFuels Oil & Gas Engineering had "concluded satisfactorily" and a seminar involving operators, investors and all stakeholders of the project took place on Sept. 18. This will be the first refinery for the OPEC member, which currently relies on imports for all its fuel needs. The refinery will use condensate from the countries Alba and Alen fields, the ministry added. Earlier in the year, Minister for Mines and Hydrocarbons Gabriel Obiang Lima said he was hoping to build two modular refineries in the country, one at the Punta Europa complex on Bioko Island, and the other at Cogo on the mainland.

** State-owned Nigerian National Petroleum Corp. is close to taking final investment decision with some investors to build a 50,000 b/d condensate refinery. NNPC signed the front-end engineering design for the construction of the plant -- which will be located in the Niger Delta -- with engineering firm KBR. NNPC is partnered in the project by indigenous oil producer Seplat Petroleum. NNPC first announced in August 2018 plans to build a condensate refinery with capacity to refine 200,000 b/d of the condensate oil produced by the country.

** Algerian state-owned Sonatrach expects to commission the Hassi Messaoud refinery in the second half of 2024, a slight delay to the previous timeline, the country's energy minister Abdelmadjid Attar told S&P Global Platts on July 29. Construction launched at the beginning of the year, and when complete, the refinery will increase Algeria's crude oil processing capacity to 31 million mt/year, Attar said. Sonatrach has contracted with Spanish and South Korean consortium Technicas Reunidas-Samsung Engineering to build the new Hassi Messaoud refinery. The consortium had been expected to deliver the refinery in the first half of 2024. Attar, a former Sonatrach CEO who was named energy minister in June, said the state company has also finalized front-end engineering and design studies for two projects at the Skikda refinery: a fuel cracker for diesel production and a naphtha processing unit for gasoline production. However, Attar said investment decisions on refinery projects in Biskra and Tiaret would not be made before 2025, as Algeria reviews its long-term energy strategy. Attar's predecessor, Mohamed Arkab, had announced in June that the Tiaret refinery would be launched in 2022. Hassi Messaoud, Biskra and Tiaret had been part of the government's 2021-24 oil sector plan, with each refinery intended to have a 5 million mt/year capacity. Technical, architectural and land development studies had been completed for the facilities in 2017.

** Commissioning of the Bentiu refinery, South Sudan, which was slated to start operation late last year, has been delayed as engineers were evacuated from the site due to fears of an escalation of the pandemic, Daniel Chuang, undersecretary in the ministry of petroleum, said July 20. Safinat, the main investor and implementer of the Bentiu refinery project in South Sudan, said earlier this year that the refinery has not started yet. Construction at the refinery in the Unity oil field started in August 2013 and precommissioning and production began in 2014, although it was subsequently damaged during military action. Restoration works on the site started in December 2018 but it was dependent on assistance from the government to minimize risks. South Sudan officials had previously said they expected the refinery to be operational in 2019.

** Benin is looking to launch the construction of a new refinery, according to a local media report. The project has been presented at the government meeting. A committee will look at the feasibility studies for the project and will also analyze the market prospects until 2030. The project will be developed as a public-private partnership. Apart from supplying the local market the refinery would also contribute to supplying other countries in the region.

** Angola's oil ministry has postponed the announcement of the winner of the Soyo refinery tender due to the coronavirus outbreak. The winner of the tender for building the refinery will be announced after the coronavirus outbreak is controlled, according to local media reports. The company to build the new Soyo refinery was due to be announced in March. Out of 31 interested companies, 15 have submitted bids in a tender for the construction of Soyo, the country's ANGOP news agency reported previously. Nine of the bids have been validated. The tender was launched in October. The refinery is expected to be completed in about three to four years. The selected company or joint venture will finance the construction of the plant on a build-operate-transfer (BOT) basis. The new plant, along with ones under consideration in Lobito in Benguela province and in Cabinda, is part of the government's plan to transform its downstream sector. This also involves refurbishing the refinery in Luanda.

** Africa Finance Corporation has signed an agreement with Brahms Oil Refineries Ltd to co-develop a refinery and storage terminal in the West African country. The deal means AFC will work on the development and subsequent financing of a petroleum storage and associated refinery project in Kamsar, Guinea. This will include a 12,000 b/d modular refinery, a 76,000 cu m crude oil storage terminal, a 114,200 cu m storage terminal for refined products, and ancillary transportation infrastructure. Guinea currently has no refineries and is entirely dependent on imports from neighboring Ivory Coast and Senegal for its fuel needs.

** Russian state development bank VEB has signed investment cooperation deals with African organizations including on financing a refinery in Morocco. The deals were signed during a Russia-Africa Summit. VEB said the memorandum on the oil refinery in Morocco was signed with the Russian Export Group and Morocco's MYA Energy, part of the Marita Group. The refinery has a planned capacity of up to 5 million mt/year. Morocco's sole refiner Samir was forced to halt processing at the Mohammedia plant in 2015 after crude oil deliveries were delayed due to financial problems. Since then attempts to resume operations or find an investor have been unsuccessful.

** Sonaref's Joaquim de Sousa Fernandes, chairman of the executive council, said that the Lobito refinery in Angola is aimed for completion in 2025. The construction of the Lobito refinery has been frozen due to high costs. Sonangol has been under pressure to build a new refinery as it heavily depends on imports for its fuel requirements, but it canceled the Lobito project in 2016. It has indicated plans for building Lobito have been revived, for a 200,000 b/d plant.

** A consortium of Russian investors is planning a $4 billion project for a new refinery in Northern Zambia at the site of the country's aging state-owned Indeni plant.

** Russian state-owned exploration company Rosgeologia is considering building the Red Sea Coast refinery in Port Sudan, which would supply landlocked countries in Africa. Sudan had begun discussions to develop a 200,000 b/d refinery on its Red Sea coast. The project's timeline has not yet been disclosed. The only refinery currently operating in the country is the Khartoum, after the Port Sudan refinery closed in 2013 and was decommissioned.

** Nigeria has reached an agreement with neighbor Niger to build an oil refinery in a border town between Niger and Katsina state in northern Nigeria.

** Kenya is hoping to decide soon on the location for a new refinery in either Lamu or Mombasa.

** Ghana's ministry of energy is in the process of submitting a proposal to build a new refinery in Tema. It will replace the 45,000 b/d Tema Oil Refinery. Separately, the government had set its sights on building a 150,000 b/d refinery in Takoradi.