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The Cabinda Oil Refinery project in Angola has reached financial close.

Africa Finance Corporation and African Export-Import Bank (Afreximbank) announced a US$335 million project financing facility for the refinery on 13 July.

The refinery is being developed by the UK's Gemcorp Holding Limited (GHL), in partnership with Angola’s state oil company, Sonangol, which holds a 10% interest. The project sponsors are providing US$138 million of equity financing.

Other lenders that contributed to the project financing facility include Industrial Development Corporation (IDC) of South Africa, Arab Bank for the Economic Development in Africa (BADEA) and Banco de Fomento Angola (BFA).

The credit facility will cover the cost of phase one of the refinery, located on Angola’s Malembo plain, 30km north of Cabinda.

The first phase will have a crude oil processing capacity of 30,000 barrels a day (b/d). Key elements of this phase of construction include a crude distillation unit (CDU), desalinator, a kerosine treating unit, auxiliary infrastructure, float anchoring system, pipelines, and a 1.2-million-barrel storage terminal. 

Brazil's Odebrecht Engineering and Construction (OEC) is the engineering, procurement and construction contractor for the project. The US' VFuels is supplying modular units for the refinery. Last year, VFuels transported the CDU from its fabrication facility in Houston to Cabinda.

Phase two will add units for catalytic reforming, hydrotreating and catalytic cracking to create a full-conversion refinery, increasing capacity by 30,000 b/d to bring the total refining capacity to 60,000 b/d.

"We are delighted to announce the successful financial close of this ground-breaking refinery project. This structural transformation project is in line with our vision to capture and retain value in the Angolan economy while reducing carbon emissions by eliminating two wasteful voyages involved in exporting crude oil as raw materials and importing it back as a refined product," said AFC president & CEO, Samaila Zubairu.

"[The] Cabinda Refinery will generate significant employment opportunities which will help to build the skilled workforce of the future. It will save valuable foreign exchange and enhance Angola’s balance of payments. It will create spin-off industries that rely on the output of the refinery thereby boosting the economy and driving long-term economic growth." 

The first phase of the refinery will be able to meet about 10% of Angola's total demand for refined oil products, increasing to 20% upon completion of phase two. The project will create over 1,300 direct and indirect jobs. The total cost of building the Cabinda refinery is estimated at US$1 billion.

Photo: Cabinda CDU passes factory acceptance test (Source: VFuels)