July 26, 2024 [Reuters]- Angola’s new Cabinda crude oil refinery is on track to start up later this year before ramping up to full first phase production of 30,000 barrels a day by July next year, the plant’s Chief Executive Marcelo Hofke said on Thursday.

With almost two-thirds of the construction completed, Cabinda is the most advanced of three new planned refineries, alongside an Eni-supported plant in Luanda being upgraded, that Sub-Saharan Africa’s second-biggest oil producer is leaning on to cut imported refined products for domestic use.

“The idea is to start commissioning by the end of this year…and we want to reach full production by the end of July,” Hofke told Reuters.

The first $473 million phase of the modular refinery will produce naphtha, jet fuel, diesel and heavy fuel oil (HFO), with the naphtha and HFO destined for export markets because Angola did not have much use for them, he said.

The first phase is expected to supply 10% of Angola’s domestic fuel market before doubling market share once the second phase to 60,000 bpd is completed.

Engineering for phase 2 is expected to start as soon as the commissioning begins by the end of this year, Felipe Berliner, group chief investment officer at Gemcorp Holdings, said.

Gemcorp is a 90% shareholder in the Cabinda refinery and state-owned company Sonangol holds the rest.

Berliner said banks that participated in the first phase are keen to continue funding a second phase that’s expected to take the total cost to $1 billion. Among original funders are Africa Finance Corporation and African Export-Import Bank.

“We believe that Cabinda has the potential to go way beyond 60,000 bpd capacity envisaged to 90 or 120,000 barrels a day on the same site,” Berliner said.

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