LUANDA, Oct. 30 (AGCNewsNet) - Angola’s Cabinda oil refinery, the country's second such facility, is slated to commence fuel production by April 2024, as the first phase of construction nears completion ahead of schedule, though over budget, according to Gemcorp Holdings Limited, the project’s largest investor.

The refinery, which will be commissioned between January and February, aims to supply the domestic market with fuels by March-April, said Atanas Bostandjiev, CEO of Gemcorp, on the sidelines of the Financial Times Africa Summit. Gemcorp holds a 90% stake in the facility.

The project, initially budgeted at $473 million, has seen costs climb to $500-$550 million, driven by inflation and pandemic-related expenses. Despite this, completion has been accelerated, surpassing the original July 2025 target.

The refinery, a greenfield project, will process 30,000 barrels of Cabinda crude daily, sourced from Angolan state-owned Sonangol, which holds a 10% stake in the venture. This capacity will satisfy 5-10% of Angola’s fuel demand, reducing the country’s heavy reliance on imported refined products.

A second phase is planned to expand processing to 60,000 barrels per day, with a hydrocracking unit to produce diesel and jet fuel. This phase is expected to be operational 1-2 years post-launch, pending funding approvals anticipated in April or May.

“Angola exports 98% of its crude and imports nearly all its refined products,” Bostandjiev noted, highlighting the inefficiencies the refinery aims to address. Currently, China absorbs around 60% of Angolan crude exports.

Initially, the refinery will export surplus fuel oil and naphtha while focusing on local diesel and jet fuel supply. It may later export refined products to the Democratic Republic of the Congo.

Gemcorp’s investment underscores the challenges faced by Western investors in oil and gas due to stringent ESG (Environmental, Social, and Governance) policies, Bostandjiev added.