26/04/15
Finance access hampering African refinery upgrades
Cape Town, 15 April (Argus) — Ivory Coast refiner SIR today said a plan for
upgrades is delayed, and other regional operators said they were struggling to
source local finance to realise upgrade and expansion plans. SIR will complete
upgrades to meet Afri-6 road fuel standards at its 75,000 b/d Abidjan refinery
by 2033, company head Tiotioho Soro told the Arda conference in Cape Town.
Construction of a gasoil desulphurisation unit began in October and will finish
in 2029, while a continuous catalyst reformer (CCR) unit and isomerisation unit
will be built between 2030-33, Soro said. Benzene content in gasoline will be
lowered from 5pc to 1pc in this period, while aromatics in blended gasoline will
fall from 42pc to 35pc. The reformer and isomerisation units were to be built by
2028, when SIR was also targeting 1pc benzene content in its gasoline, the
company's director of development and energy transition Raphael Souanga told the
conference [two years ago]
(https://direct.argusmedia.com/newsandanalysis/article/2561705). Construction of
a refinery unit that could run Ivorian Baleine crude is planned between 2028-32,
Soro said. It is unclear if the plan is for a new crude facility, or for
expansion to Abidjan. SIR had planned to increase capacity at Abidjan to 90,000
b/d by 2028, Souanga said previously. SIR is otherwise seeking to install an
unspecified number of single point (SPM) and conventional buoy moorings (CBM),
with project completion forecast for 2029, Soro said. An expansion in crude and
refined products storage capacity is envisaged to be built between 2027-29.
Capacity was not specified. Investors have expressed interest in financing SIR's
expansion and modernisation plans, Soro said today. Finance access varies
between African refiners By contrast, Congo (Brazzaville) state-owned refiner
Coraf sees the major constraint on its 24,000 b/d Pointe-Noire refinery upgrade
project as "the difficulty in finding finance", according to the company's
deputy general administrator Patrice K'Yao. The country's only refinery is
loss-making because of low domestic retail fuel prices and is targeting an
improvement in road fuel specifications and a cut to fuel oil yields. Road fuels
at the plant currently contain 150ppm sulphur in gasoline and 500ppm in gasoil,
while discount fuel oil represents half of product output. Production at
Pointe-Noire covers 50-70pc of local oil products demand, according to K'Yao.
Coraf also plans to debottleneck its reformer unit to raise the amount of
gasoline sold domestically and to curb naphtha exports. It is building a 50,000
b/d refinery, also in Pointe-Noire, with completion now put in 2027. This is a
latest delay to the project, where construction began officially in 2021. A
second phase would double capacity to 100,000 b/d, requiring another two years
to complete, according to Itoua. Access to "long-term, low-cost financing
remains limited" for refiners, said Nigerian refinery association chairman Coran
Momoh-Jimah Oyarekhua. African governments should facilitate financing for
refineries "through initiatives such as providing first-loss or anchor capital
to de-risk projects and crowd in private investment", he said. Models such as
"crude-backed financing structures, long-term offtake agreements integrating
producers, refiners and traders" could mitigate hurdles to sourcing finance, he
said. Home-grown African financial institutions are harder to find for financing
for Senegalese state-owned SAR's refinery expansion plans, general manager
Mamadou Diop said today. But SAR is otherwise not short of investor interest to
expand the nameplate capacity of its 30,000 b/d Dakar refinery to 110,000 b/d
through the construction of a second plant, according to Diop. Chinese firms are
most likely to help finance the delayed expansion , according to a source close
to the refinery. The Dakar refinery expansion would lead to output exceeding
current national demand or 3mn t/yr, despite strong oil product demand growth of
around 4pc/yr in the country, Diop said. By George Maher-Bonnett Send comments
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