Sonangol Undertakes Construction of Lobito Refinery in Angola

05-18-2007

Angola`s National Oil Company (Sonangol) will take upon itself the construction of the Lobito refinery, following failure to reach an agreement with the Chinese firm "Petrochemical Corporation (Sinopec)" initially contracted to set up partnership with.

According to Sonangol managing board chairman, Manuel Vicente, the break-up with the Chinese was owed to misunderstandings between the parties about the specifications of the products that should be produced.

He said that despite this, the refinery will be ready by 2010, after all financial arrangements for the construction are made.

With the start of Lobito refinery, whose construction is estimated at three billion US Dollars, the country will save USD 500 million in import of oil derivatives, and start exporting.

The plant is designed to refine 240,000 barrels a day, starting in a first phase with six million metric tons a year, about 120,000 barrels a day.

In the second phase, the source added, production will rise to 10 million metric tons, that is 240,000 barrels as day.

Currently, Angola that produces about 1.4 million barrels a day, has only one refinery, built in the 1950`s, near Luanda, with the limited producing capacity of 40,000 barrels daily.

The construction of Lobito refinery will solve the shortage in the supply of fuel, which Sonangol has been mitigating with imports.

Angola is the second major oil producer in Africa south of Sahara, after Nigeria, with its oil reserves estimated at 12 billion barrels.