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An African Giant Pumps Up The American Economy

An African Giant Pumps Up The American Economy

As a rule, Foreign Direct Investments(FDIs),  flow from the rich west to the jungles of Africa. One case that proves the exception is Sasol’s proposed investment in America’s plastics and chemicals industry.

The South African born synfuels manufacturer and the world’s largest producer of motor fuel from coal, says it will profit from the investment in two new plants, based in Louisiana, the United States Of America. “The proposed investment is estimated to be between $16 and $21 billion, making it the largest foreign investment in the State of Louisiana’s history”, Sasol says in a statement.

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At last, Tullow Gets What It Wants

The recent agreement between the Ugandan Government and three International Oil Companies, calling for a 30,000Barrels Per Day refinery in Uganda, as well as export pipeline, is the deal that Tullow Oil has sought for the past five years. In the war of rhetoric with the Ugandan government, Tullow Oil had always insisted it could do a small scale refinery in Uganda but must build an export pipeline to export most of the crude.

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Egypt’s Fuel Subsidy To Scale $20Billion

Fuel subsidies will cost Egypt around $20.3Billion(140Billion Egyptian Pounds) if a reform does not kick in before the end of the fiscal (2012/2013) year, according to the country’s energy minister.

North Africa’s largest economy is under pressure to curb its soaring fuel subsidy bill, which accounts for a fifth of state spending, to secure a $4.8 billion loan from the International Monetary Fund.

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Nigerian Minnow Plans A 5,000BOPD Refinery

Nigerian independent, Waltersmith Petroman, is evaluating the feasibility of installing a 5,000 BOPD refinery on its Ibigwe field in the eastern Niger Delta basin. The refinery, it hopes, “will provide an alternative income stream especially in the wake of very frequent disruption in export schedules caused by the vandalisation of pipelines in the Niger Delta”, the company said in a statement.

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Oilmoz Maintains Its Wish For Large Scale Refinery

Mozambican state oil company Oilmoz insists it had reached an agreement with an unnamed American “sovereign trust” to help finance a proposed $12-billion, 350, 000 barrel-per-day oil refinery.

Fausto Cruz, the company’s chief executive, was reported as saying that “we have finalised the funding agreement and we expect to begin construction in the middle of 2013,”, told from Reuters quoted him as saying that funding had been guaranteed for up to $17-billion.

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South Sudan Joins The League of Small Refineries

South Sudan has signed an agreement with an American engineering firm for the construction of 10,000BOPD mini-refinery. Ventech Engineers is expected to install the plant in the country’s Upper Nile State.

Stephen Dhieu Dau, the Petroleum Minister, says that South Sudan plans to expand the refinery to “20,000 barrels per day throughput capacity in a few years,” in a statement.

The refinery would be finished within 10 months, he says, meaning, around August 2013.


The Business Case For Large Scale Ugandan Refinery

To go by the stories in the international business press, the Ugandan government has stonewalled oilfield development in the country largely because it prefers the crude to be refined in the country, rather than exported.

Tullow Oil, the most visible operator in the country, cuts the image of a hapless IOC trying to help a cash strapped economy earn money by developing and exporting its crude, but running into opposition instead of fawning gratitude.
“You can have both(refinery and a pipeline)”, Tullow’s founder and CEO Aidan Heavy said in June 2012. “But you cannot have an oil industry without a (crude oil export) pipeline”, he told the Ugandan Chamber of Mining and Petroleum Journal.

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Egypt Starts Construction of a $3.7Billion Refinery in 2013

EGYPT Refining Company(ERC) hopes to begin construction of a new 100,000BOPD green field refinery in 2013 and expects it to be fully operational by the end of 2016.
Cairo Oil Refinery Company (CORC), the nation’s largest refinery with 20% of Egypt’s current refining capacity, will provide ERC with fuel oil as feedstock. The new refinery will be an import substitution project delivering diesel and other high-value products to the state hydrocarbon company, EGPC at the heart of the consumption market in Greater Cairo.
ERC is a special purpose vehicle including Citadel Capital and EGPC. In August 2010, it signed a $2.35 billion senior financing package in provided by Export Credit Agencies and Development Finance Institutions including the Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), the Export-Import Bank of Korea (KEXIM), the European Investment Bank (EIB) and the African Development Bank (AfDB). In addition, a total of $ 225 million of subordinated debt financing is being provided by Mitsui & Co. and AfDB.


Chinese Refineries, African Locations

If the Joint Study Agreement between Sinopec and PetroSA goes through to commercial phase, the Chinese will have a hefty investment in a 400,000BOPD Crude Oil Refinery in South Africa.

The anticipated cost of constructing this mammoth hydrocarbon processing facility in South Africa’s Eastern Cape has been put at somewhere between $9 and $12 Billion.
This promises to be China’s largest investment in an African Refinery.
Or does it?

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Investors Watch As Zambia Decides On Refinery Sale

South Africa’s synfuels giant Sasol and India’s Essar Group are two of several companies known to be waiting in the wings, as the Zambian government takes a decision on selling stakes in the Indeni Refinery sometime in March 2010.

The government would also, on that date, decide whether to divest the refinery along with the 1,300km Tazama pipeline that brings crude from Dar es Salaam port in Tanzania.

Indeni Refinery has a capacity to refine around 1 million tonnes per annum (MTPA) of crude, but the current configuration allows separation of only diesel and LPG. The firm that gets the refinery will have to invest money, no less than $l50Million for refurbishing and augmenting refining capacity as its current configuration.

Sasol, which already converts imported gas from Mozambique to petrochemical products in South Africa, will use the refinery to further its petro-product footprint on the continent. Meanwhile, Essar, which has acquired the Mombasa refinery in nearby Kenya,  plans to use the refinery, one of the few inland refineries in Africa, to supply petroleum products to the Democratic Republic of Congo, Malawi, Zambia and even East Angola.

Currently, the liquefied petroleum gas (LPG) produced at the refinery goes to Kenya by road. Essar plans to take petroleum products instead of LPG to Mpulungu harbour in north Zambia, which is located on lake Tanganyika, and then supply it to countries such as Libya, Kenya, Tanzania, Burundi and some East African countries by ship as the lake connects all these countries.

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