Sonangol and China National Chemical Engineering Company (CNCEC) signed a contract for the construction of the Lobito Refinery in Angola. The final agreement, which provides for construction, technical support and supervision, follows the Memorandum of Understanding between the two parties, signed four months ago in Beijing.
The refinery is to have the capability of refining up to 200,000 bopd (barrels of crude oil per day) to contribute to the effort that the Angolan State is carrying out for the gradual elimination of the current dependence on imports of refined products, mainly gasoline and diesel.
According to the US Energy Information Administration (EIA), Angola is the second-largest total liquid fuels producer in Sub-Saharan Africa, after Nigeria, based on annual 2021 production levels. Angola’s economy is largely based on hydrocarbon production, making it vulnerable to crude oil price swings.
Angola’s oil fields generally produce light to medium crude oil, which has a relatively low-sulfur content (low-sulfur crude oil grades are classified as sweet). The qualities and characteristics of Angola’s crude oil grades are popular with refiners in the Asia-Pacific region, the EIA said.
According to the World Bank Group, Angola exited a five-year recession in 2021, and its economy continued to grow in 2022, mainly because of increased crude oil production and high oil prices.
Angola is a member of the Organization of the Petroleum Exporting Countries (OPEC) and a participant of the OPEC+ production cut agreement that began in 2016; the country also signed a new OPEC+ agreement in May 2020.
As of early 2023, Angola has only one operating refinery, which is located in the Luanda province and has a nameplate capacity of 65,000 bopd, accordingto the EIA. Angola has three other refineries that are under development.