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Lobito refinery will be Angola's largest refinery

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Construction expected to start next year, executive says

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Luanda refinery upgrade to boost output by 2028, executive

says

By Wendell Roelf

CAPE TOWN, April 9 (Reuters) - Angola's Sonangol is in

talks with Chinese and European banks to overcome a $4.8 billion

funding shortfall for its planned 200,000 barrel per day Lobito

refinery, an executive with the state-owned oil company told

Reuters.

Angola is Sub-Saharan Africa's second-biggest crude oil

exporter but imports around 80% of its refined products. It has

launched a programme to build new refineries and revamp existing

facilities to reverse the trend and become a net exporter.

Development of the facility in the Atlantic port city of

Lobito was restarted in December 2023 after remaining stalled

for almost a decade. When completed, it will be Angola's largest

refinery.

Joaquim Kiteculo, chief executive of Sonangol's refining

division, said the total cost of the project was $6.6 billion,

with the single-train refinery with a hydrocracker alone costing

$5.3 billion.

"We are not only dealing with Chinese banks, we are looking

for other alternatives as well," he said on the sidelines of an

energy conference in Cape Town, South Africa. "We are confident

the financing will be raised, and the refinery will go ahead."

Construction, he said, was expected to start next year.

Kiteculo added Sonangol was in discussions with banks

including the Industrial and Commercial Bank of China, Societe

Generale, Standard Chartered ( SCBFF ) and Afreximbank.

Sonangol is investing $950 million of its own money during

the first phase of Lobito, mainly for infrastructure such as

roads and offices. Kiteculo did not say who the other committed

investors are.

China National Chemical Engineering Co. Ltd. is

the construction and engineering contractor for the refinery.

Houston, Texas-headquartered KBR is consulting on the

project after preparing the front-end engineering and design

work.

"Even though we are still dealing with funding issues we

expect to have the mechanical completion for the whole refinery

in the first semester of 2027 ... and then have the first batch

of products and start the commercialisation phase," Kiteculo

said.

He dismissed as untrue recent media reports that Nigeria's

Aliko Dangote, who built the continent's largest refinery in

Nigeria and visited the Angolan capital Luanda recently, was

interested in partnering on the Lobito project.

Meanwhile, Kiteculo said an upgrade of Sonangol's Luanda

refinery being carried out in partnership with Italy's Eni

should increase its output from 65,000 bpd to 120,000

by 2028. A separate biorefinery targeting sustainable aviation

fuels is also being considered under the partnership, he added.

"We are sure we are going to become one of the major

exporters to Africa, including South Africa which is a big

consumer market," he said.