African downstream and upstream stakeholders on Tuesday agreed to collaborate on harmonising fuel specifications in individual regional economic communities and to develop regional downstream and midstream infrastructure.
The African Refiners and Distributors Association (Arda) and its sister group African Petroleum Producers Organisation (Appo) penned a memorandum of understanding on 14 April as a basis for collaboration on the refining, storage and distribution sectors.
Arda is leading efforts to harmonise "cleaner fuels standards for African Regional Economic Communities", according to the MoU. The association aims for African road fuels to contain no more than 10ppm sulphur by 2030. But Arda's emphasis on regional economic communities may reflect stakeholder views that a regional focus could help countries converge on fuel safety regulations more effectively where fuel specifications diverge vastly between immediate neighbours.
Southern Africa fuels have a huge spread in sulphur content among neighbouring markets, according to executive director of the Regional Energy Regulators Association of Southern Africa (RERA) Francois Robinson. Diesel varies in sulphur content from 10ppm in South Africa, to 500ppm in neighbouring Zimbabwe, to over 1,000ppm in the Democratic Republic of Congo. Within Mozambique, 50ppm sulphur is used in road fuels in the capital Maputo, while 500ppm sulphur content is permitted in the rest of the country, he said.
RERA is suggesting stepwise conversions with binding timelines for lowering road fuel sulphur contents. The association's blueprint outlines less than 500ppm sulphur content across southern Africa by 2027, under 50ppm by 2030, and less than 10ppm by 2035.
The southern African regulator's timeline hints at delays to African refined products markets achieving Afri-6 standards by the 2030 deadline. Extensions would be requested by countries in 2030, director of quality assurance at Ghana's National Petroleum Authority (NPA) Setsoafia Agebnoto said. Ivory Coast's 75,000 b/d Abidjan refinery is meanwhile targeting Afri-6 standards only by 2033, according to the energy ministry's director general of hydrocarbons Esse Bienvenu.
Fresh refinery push
The MoU also prioritises the development of "regional infrastructure for refining, storage and distribution of petroleum products".
Appo secretary General Farid Ghezali on Monday presented an outline for five "integrated regional [refining] hubs". Refinery expansion across the continent is key to prevent a "value haemorrhage" as the continent exports 75pc of its crude while importing 70pc of its refined product requirements.
African refining capacity appears to fall far short of meeting domestic product demand. The continent needs "six more Dangote refineries" to meet local requirements, Arda executive secretary Anibor Kragha said Monday.
A West Hub would centre on Nigeria, according to Ghezali, while a Central Hub would focus on Angola, a Southern Hub on South Africa, an Eastern Hub on Tanzania, and a Northern Hub on Algeria. Appo is targeting 3mn b/d in refining production by 2035 across the regions.
It was not clear whether existing and planned refining capacity was factored into the calculus. Appo did not immediately respond to a request for comment.
The Eastern Hub would focus on gasoline and polymers production for the eastern coast of Africa, according to Ghezali, where the region imports high volumes of gasoline from the Mideast Gulf and is currently exposed to the strait of Hormuz closure. Meanwhile, the Northern Hub would serve as an aromatics hub for the Mediterranean, Ghezali said.
Appo will "validate" regional road maps for the refinery hubs in the final quarter this year before presenting the plan next year, according to Ghezali.
