july 2018...measure flare gas for safety and environmental compliance. 87 proactive protection dr...
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July 2018
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CONTENTS
THIS MONTH'S FRONT COVER
July 2018 Volume 23 Number 07 ISSN 1468-9340
03 Comment05 World News10 Diverse and developing
Nancy D. Yamaguchi, Contributing Editor, explores Sub-Saharan African oil and natural gas resources and downstream operations.
19 A novel approachYoudong Tong, Feng Su and Peter Sun, Nalco Champion, an Ecolab Company, along with Guang Tian, Gui-Hong Huang, and Dong-Feng Su, China National Offshore Oil Corp. (CNOOC), present an approach to acrylic acid fouling control.
24 AdifferentmindsetWith uncertainty in the global transportation fuels market, Ujjal Mukherjee, Chevron Lummus Global, USA, outlines key considerations for crude to chemicals operations.
33 UnifiedcatalystdevelopmentSteven Zink, Honeywell UOP, USA, explores a unified approach to hydrotreating catalyst development.
39 What to do with too much naphtha?Bart de Graaf, Ray Fletcher, Herman van den Bold, and Niels van Buuren, Inovacat B.V., the Netherlands, explain how new naphtha conversion technologies can help address increasing demand for propylene.
43 Delivering valueCh. Chau, Y. Jeong, R. Hu, and M. Federspiel, W.R. Grace & Co., USA, discuss how to boost resid-to-propylene with premium FCC catalytic solutions.
47 Metals managementCarl Keeley, Vasilis Komvokis, Fernando Sánchez Arandilla and Modesto Miranda, BASF, Europe, introduce a new catalyst for heavy resid feedstock applications.
51 Taking steps to reduce FCC NOX emissionsMiray Genç, Aytaç Gül, Eda Bayraktar Dalgıç, and Şeyma Avcılar, Tüpraş, along with Tom Ventham, Johnson Matthey, map out the path that the Tüpraş İzmit Refinery took when exploring the subject of fluid catalytic cracking (FCC) NOX reduction.
57 Avoiding the invisible pitfallsBradford M. Cook, Sabin Metal Corp., USA, explains how effective precious metal management can help to maximise returns for refiners.
60 Improving reliabilityMike Minnerly and Taylor Birckbichler, Elliott Group, USA, discuss how a rerate of a refiner’s poorly performing hot gas expander resolved its reliability issues.
65 A welcome boostIpek Öztürk, Kurita Europe GmbH, explains how chemical treatment programmes can help boost the efficiency of wastewater treatment.
71 Targeted deliveryConcetta Sapio, SUEZ Water Technologies & Solutions, Italy, recalls how microbiological growth and sulfate-reducing bacteria levels were controlled at a refinery in Italy.
75 Controlling water-steam cyclesJens-Uwe Schröter, LAR Process Analysers AG, Germany, discusses how online total organic carbon analysis can help optimise and control water-steam cycles in the downstream oil and gas industry.
79 Chilled outA. M. Derevyagin, G. A. Derevyagin, S. V. Selesnev and P. C. Lyon, Vympel, introduce the next generation of chilled-mirror hygrometers.
83 A measure of successEric Benson, HollyFrontier, Steve Cox, Fluid Components International (FCI), and Scott Anderson, LaTech Equipment, USA, review a case where flow meters helped a refinery to measure flare gas for safety and environmental compliance.
87 Proactive protectionDr Alexander Horch, HIMA Paul Hildebrandt GmbH, Germany, explains why safety and security in refining and processing needs rethinking.
91 An inside out defenceSam Galpin, Bedrock Automation, USA, explains how the use of public key infrastructure can enhance plant security.
95 Pumps, Valves & Seals ReviewHydrocarbon Engineering presents an overview of some of the recent developments and technologies in pumps, valves and seals for the downstream oil and gas industry.
Elliott Group is supplying Africa's first hot gas expanders. Two TH140-1 hot gas expander strings will be installed at a grassroots refinery in Nigeria. Designed to produce over 26 MW each, the units were manufactured and tested at Elliott’s Jeannette, Pennsylvania, US, facility and shipped in early 2018, with commissioning planned for 2019.
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COMMENTCALLUM O'REILLYEDITOR
T he outcome of the latest OPEC meeting has left analysts scratching their heads. The official line following the 174th
meeting of OPEC members – and the subsequent meeting with leading non-OPEC producers – was as follows: “Countries will strive to adhere to the overall conformity level,
voluntarily adjusted to 100%, as of 1 July 2018 for the remaining duration of the [Declaration of Cooperation].”
In other words, OPEC is aiming to ensure that production cuts return to 100% compliance with the targets agreed in late 2016, following an impressive rate of compliance that reached 147% in May 2018, according to OPEC figures. This means that more oil will need to be pumped. However, aside from this fact, the details remain sketchy.
Saudi Arabia’s Energy Minister, Khalid al Falih, reportedly claimed that output would increase by up to 1 million bpd.1 Where exactly the increased production will come from remains uncertain in light of the fact that several OPEC countries are unable to raise output, although it is likely that Saudi Arabia, its Gulf allies and Russia will be the ones to step up. Concerns surrounding Venezuela, in particular, are growing. The country is in the midst of an economic and political crisis that has already seen it involuntarily cut its output by 700 000 bpd in the past year, and experts warn that this figure is likely to grow. Meanwhile, Iran – who opposed the decision to increase production – faces fresh sanctions from the US, and there is the potential for a sustained period of supply insecurity in Libya. Paul Horsnell, Head of Commodities Research at Standard Chartered, has suggested that there could be a further drop in production of between 1.5 million and 2.3 million bpd from these three countries alone by the end of this year.2
Combined with the shortage of pipeline capacity in the Permian basin, which will see US production growth slowing, analysts have raised concerns about a limited amount of spare capacity in the market, which could lead to a potential price spike. As Bloomberg’s Energy Columnist, Liam Denning, explains: “While higher prices would bring a near-term windfall for Saudi Arabia and Russia, the cost would be steep, ranging from a tweet-rage from Pennsylvania Avenue to demand destruction and serious dissent in OPEC’s ranks as Iran and others see fellow [OPEC] members profiting further from their woes.”3
Of course, in the longer term, the prospect of a dramatic increase in US tight oil production is an even bigger problem for OPEC and other producing countries. The US will become a significant exporter as demand increases and in such a scenario, the Financial Times’ Nick Butler believes that continued management of supply by OPEC and other producers would be needed to avoid a sharp price fall.4
All of this serves to highlight the delicate balancing act that OPEC continues to face. We’ll continue to keep track of the latest developments at www.hydrocarbonengineering.com
1. CROOKS, E., ‘The week in energy: Perspectives on Opec’, Financial Times, (25 June 2018).2. RAVAL, A. and SHEPPARD, D., ‘All eyes on oil supply after Opec deal to boost output’,
Financial Times, (26 June 2018). 3. DENNING, L., 'OPEC’s Gonna Give It the Old College Try, Folks', Bloomberg, (22 June 2018).4. BUTLER, N. ‘Issues beyond Opec will drive oil prices in coming years’, Financial Times,
(24 June 2018).
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WORLD NEWS
July 2018HYDROCARBON ENGINEERING
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India | Saudi Aramco and ADNOC partner on refinery project
Saudi Aramco and the Abu Dhabi National Oil Co. (ADNOC) have
signed a framework agreement to jointly develop the Ratnagiri Refinery and Petrochemicals Ltd (RRPCL), a 1.2 million bpd integrated mega refinery and petrochemicals complex.
The agreement defines the principles of the joint strategic cooperation between Saudi Aramco and ADNOC to jointly build, own and operate the complex in collaboration with a consortium of Indian national oil companies, currently consisting of Indian Oil Corp. Ltd (IOCl), Bharat Petroleum Corp. Ltd (BPCL), and Hindustan Petroleum Corp. Ltd (HPCL). Saudi Aramco and ADNOC will jointly own 50% of the new joint venture company, RRPCL, with the remaining 50% owned by the Indian Consortium.
The companies also signed a Memorandum of Understanding (MoU) and acknowledgement.
The agreements have been signed to explore a strategic partnership and co-investment in the development of the new US$44 billion mega refinery and petrochemicals complex. A pre-feasibility study to determine the project’s overall configuration will now be jointly executed by the parties.
Mexico | Kiewit and TechnipFMC win LNG contract
Sempra LNG & Midstream, a unit of Sempra Energy, has announced
that a TechnipFMC and Kiewit partnership has been selected as the engineering, procurement, construction and commissioning (EPC) contractor for the Energía Costa Azul (ECA) liquefaction
project under development in Baja California.
The TechnipFMC-Kiewit partnership will perform the engineering, planning and related activities necessary to prepare, negotiate and finalise a lump-sum EPC contract for the project, leveraging the
two companies’ extensive experience on LNG projects worldwide.
Permitted to be built adjacent to the existing ECA regasification facility, the liquefaction project is being developed by Sempra Energy to provide customers with direct access to west coast LNG supplies.
Singapore | ExxonMobil to expand lubricant basestocks and fuels production
ExxonMobil is progressing a multi-billion dollar project at its
integrated manufacturing facility in Singapore to produce higher-value products and expand lubricant basestocks production to meet growing demand. Should the project proceed, startup is anticipated in 2023.
ExxonMobil plans to develop and apply proprietary technologies that will convert lower-value byproducts into cleaner, higher-value products, including high-quality light and heavy lubricant basestocks. The technologies will also allow the company to introduce a new high viscosity Group II basestock.
Designed to help blenders achieve greater formulation flexibility and simplify global testing, these products will allow customers in Asia Pacific to cost-effectively blend a range of finished lubricants.
The refinery expansion project will also result in the production of more clean fuels with lower sulfur content, including high-quality marine fuels that comply with the International Maritime Organization’s 0.5% sulfur cap to help customers meet the reduced sulfur limit.
This project is the company’s latest and most significant in a series of recent investments in basestock production in Singapore.
Worldwide | Gas spending set to increase
A recent survey from DNV GL suggests that nearly two-thirds
(64%) of oil and gas sector leaders expect to increase or sustain spending on gas projects in 2018, as the sector prepares for gas to overtake oil as the world’s primary energy source in the mid-2030s.
The vast majority (86%) of the 813 senior industry professionals surveyed agree that gas will play an increasingly important role in the global energy mix over the next decade, up from 77% last year.
The findings appear in ‘Transition in Motion’, a special report from
DNV GL’s research on the outlook for the oil and gas industry in 2018. It reveals the primary driver for investment in natural gas and LNG projects this year is the global energy transition.
The pace of the oil and gas industry’s intentions to lower carbon emissions differs by region, however. Just a third of survey respondents in North America (33%) say that their company is actively preparing for the shift to a lower carbon energy mix this year, compared to more than half (51%) in the Middle East and North Africa.
WORLD NEWSIN BRIEF
July 2018 HYDROCARBON ENGINEERING
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Kuwait | First modules arrive for Al-Zour Project
The first modules for the Kuwait Integrated Petroleum Industries
Co. (KIPIC) Al-Zour project have arrived in Kuwait.
Fluor is working with its joint venture (JV) partners to deliver two engineering, procurement, fabrication and construction packages for key process support units, utilities and infrastructure for the Al-Zour refinery project. Upon completion, the new complex is expected to be one of the largest refineries in the world and produce 615 000 bpd.
Modules are being constructed at the COOEC-Fluor Heavy Industries
Co. Ltd (COOEC-Fluor) fabrication yard in Zhuhai, China. The first 14 of the 188 modules were loaded onto a shipping barge and sailed away in May to Kuwait. The sailaway of the modules was marked by a ceremony officiated by Hatem Al-Awadhi, KIPIC’s Deputy CEO, and Jim Brittain, Group President of Fluor’s Energy & Chemicals business, and was attended by executive members of the project team.
The Fluor-led JV, known as FDH JV, includes Daewoo Engineering and Construction and Hyundai Heavy Industries.
south koreahte – the high throughput experimentation company – has supplied a 16-fold high throughput catalyst testing system for hydrotreating of heavy feeds to SK Innovation. The unit is able to process heavy feeds, such as atmospheric residue.
usaFreeport LNG Marketing LLC has entered into a binding mid-term sales and purchase agreement (SPA) with Trafigura Pte Ltd for 0.5 million tpy to be supplied from its natural gas liquefaction and LNG loading facility on Quintana Island near Freeport, Texas. The SPA with Trafigura will commence on 1 July 2020, soon after the expected completion of construction of the third liquefaction train.
chinaClariant has announced the official opening of two new, fully-owned additives facilities at its site in Zhenjiang. This completes a multi-million investment originally announced last year and puts Clariant’s Additives business in China on track to further expand its offering of customised, high-end solutions for the plastics, coatings and ink industries.
eastern europeMOL Group has entered into a strategic partnership with Inovacat. The cooperation is expected to further upscale and commercialise Inovacat’s GasolfinTM technology, which converts naphtha into propylene, butylene and BTX (benzene, toluene, and xylene), while supporting MOL’s strategic objective to become a leading chemical company in Central Eastern Europe.
Egypt | SIDPEC selects Honeywell propylene technology
S idi Kerir Petrochemicals Co. (SIDPEC) has chosen Honeywell
UOP’s C3 OleflexTM technology to produce 500 000 tpy of on-purpose propylene at SIDPEC’s refinery in Amerya, near Alexandria.
Honeywell will also provide the process design package, proprietary and non-proprietary equipment, on-site operator training, technical services for startup and continuing operation, and catalysts and adsorbents for the project. When completed, the SIDPEC unit will be
the first Oleflex unit operating in Egypt.
According to IHS Markit, annual demand for polypropylene in Africa was 1.9 million t in 2016. But due to rapid population growth and urbanisation, this demand is expected to rise by an additional 1 million t in the next decade. Egypt is the top consumer of polypropylene in Africa, consuming approximately 4.4 kg per capita, and demand there is projected to grow by more than 5% annually through 2022.
USA | PGNiG and Port Arthur LNG ink deal
Polish Oil & Gas Company (PGNiG) and Port Arthur LNG, a subsidiary
of Sempra LNG & Midstream, have entered into an agreement relating to the terms of delivery of LNG from the Port Arthur liquefaction facility.
The agreement defines basic terms and conditions of a 20-year contract to be finalised between the parties for the sales and purchase of
2 million tpy of LNG, which equals approximately 2.7 billion m3/y of natural gas following regasification.
Cargoes will be supplied starting in 2023 from the Port Arthur LNG facility, which is being developed in Jefferson County, Texas. The documents were signed during the World Gas Conference in Washington, D.C.
WORLD NEWS
July 2018 HYDROCARBON ENGINEERING
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UK | Wood extends partnership with SABIC
Wood has secured a new contract with SABIC UK
Petrochemicals Ltd (SABIC), to provide industrial services at the Olefins 6 plant in Wilton, Teesside, which produces ethylene and propylene.
The contract, effective immediately, is to provide rope access, scaffolding, insulation and coatings services to support
pipework and vessel inspections This contract extends Wood’s support of SABIC globally; the company currently supports SABIC in operations in the US and Saudi Arabia. It also recently signed a contract with SABIC and Saudi Aramco to develop the world’s largest fully integrated crude oil to chemicals (COTC) complex.
USA | Phillips 66 to expand Sweeny Hub
Phillips 66 has announced it is proceeding with an expansion of
the company’s Sweeny Hub near Old Ocean, Texas.
The project, which is expected to cost up to US$1.5 billion and begin commercial operations in late 2020, includes the construction of two 150 000 bpd NGL fractionators, additional NGL storage capacity, and associated pipeline infrastructure.
S & B has been selected by Phillips 66 to perform engineering, procurement and construction (EPC) for the two NGL fractionation plants. The plants will have a combined capacity of 300 000 bpd
and will be based on S & B’s proven fractionation plant design.
The Sweeny Hub currently has 100 000 bpd of fractionation capacity through Phillips 66 Partners’ Sweeny Fractionator One, 200 000 bpd of LPG export capability, and access to 9 million bbls of gross NGL storage capacity at the nearby Phillips 66 Partners’ Clemens Caverns.
Upon completion of the expansion, the Sweeny Hub will have 400 000 bpd of NGL fractionation capacity and access to 15 million bbls of total storage capacity.
DIARY DATES UAE | SNC-Lavalin and Florexx ink agreement
SNC-Lavalin has signed an exclusive agreement with Florexx
International Investments LLC for the extended basic engineering and subsequent design and delivery of an Advanced Topping Refinery.
Under the agreement, SNC-Lavalin will carry out the initial basic engineering, master planning, process technology evaluation and selection to support project financial investment decision approvals, expected in 3Q18.
Once the project proceeds to the engineering, procurement and construction (EPC) phase, SNC-Lavalin will carry out the complete design and delivery of the refinery, working alongside Emirati contractors to maximise in-country value.
Advanced Topping Refineries use distillation columns to separate crude oil into different petroleum products, including naphtha, diesel, kerosene and fuel.
12 - 13 September 201811th Annual National Aboveground Storage Tank Conference & Trade ShowGalveston, Texas, USAwww.NISTM.org
13 - 14 September 201811th EFRC ConferenceMadrid, Spain www.recip.org
17 - 20 September 2018GastechBarcelona, Spain www.gastechevent.com
18 - 20 September 2018Turbomachinery & Pump SymposiaHouston, Texas, USA tps.tamu.edu
26 - 27 September 2018Tank Storage AsiaSingaporewww.tankstorageasia.com
27 September 2018Tank Storage Conference & ExhibitionCoventry, UKwww.tankstorage.org.uk/conference-exhibition
9 - 11 October 2018Asia Downstream WeekBangkok, Thailandwww.europetro.com
22 - 24 October 20186th Opportunity Crudes ConferenceHouston, Texas, USAwww.opportunitycrudes.com/houston2018
12 - 15 November 2018ADIPECAbu Dhabi, UAEwww.adipec.com
1 - 5 April 2019LNG 2019Shanghai, Chinawww.lng2019.com
HYDROCARBON ENGINEERING
10July 2018
HYDROCARBON ENGINEERING July 201811
S ub-Saharan Africa is defined as the geographic region of Africa south of the Sahara Desert, generally subdivided further into West Africa, Central Africa, East Africa, and South Africa. This article focuses on the belt of Sub-Saharan countries traversing Africa from West to East.
The World Bank reports that economic growth in Sub-Saharan Africa is recovering after a sharp slowdown in 2015 – 2016. Economic growth picked up from 1.3% in 2016 to 2.4% in 2017, being led by the largest economies: Nigeria, South Africa, and Angola. Nigeria and South Africa have passed through economic recessions. The Bank noted an increase in output from the mining and agricultural sectors. High prices for commodities are helping to control current account deficits. The World Bank forecasts economic growth of 3.2% in 2018 and 3.5% in 2019.
There is enormous variability in the economic outlook, and a large gap between rich and poor. The Bank foresees weak prospects in Central African countries (Gabon, Cameroon, Chad, the Central African Republic, the Republic of the Congo, and Equatorial Guinea). However, some of the recent economic difficulties may be alleviated by rising prices for commodities, including oil for those countries possessing oil and able to market it efficiently. Oil wealth has caused divisiveness in some countries, particularly those with large gaps between rich and poor. This article provides a regional briefing on Sub-Saharan Africa, focusing on countries with oil and natural gas resources and downstream industries.
The reserves pictureMany Sub-Saharan countries possess oil and gas reserves, but proven reserves vary widely. The largest oil reserves are held by Nigeria, Angola, Sudan and South Sudan, Uganda and Gabon. The largest gas reserves are held by Nigeria, Mozambique, Angola, and Cameroon.Table 1 presents estimated proved oil reserves in the Sub-Saharan African countries.
Oil productionThe largest oil producers in Sub-Saharan Africa are its OPEC members – Angola, Nigeria, Equatorial Guinea, and Gabon – responsible for 89% of Sub-Saharan oil output
Nancy D. Yamaguchi, Contributing Editor, explores Sub-Saharan
African oil and natural gas resources
and downstream operations.
July 2018 HYDROCARBON ENGINEERING
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in 2016. Figure 1 displays the trend in oil output, per BP. Low global oil prices and unplanned outages contributed to a drop in output of approximately 856 000 bpd between 2010 and 2016.
As OPEC members, Angola and Gabon are participants in the OPEC production cut agreement. Angolan output averaged 1.64 million bpd in 2017, relative to its pledged quota of 1.67 million bpd, giving it a compliance rate of 102%. Gabon produced 20 000 bpd in 2017, relative to its pledged quota of 193 000 bpd, giving it a compliance rate of 96.5%. Nigeria was allowed to bow out of the cuts because of chronic internal unrest. Equatorial Guinea was not a full member of OPEC at the time the production cut agreement was inked, but its production fell from 185 000 bpd in 2015 to 135 000 bpd in 2017, according to OPEC.
Key country profiles1
Table 2 presents crude refining capacities in the key countries covered in these profiles.
AngolaAngola has one of Africa’s largest oil industries. It is a participant in the current OPEC production cut agreement. According to OPEC, Angolan crude production averaged 1.64 million bpd in 2017, down from 1.73 million bpd in 2016. The country had pledged to reduce output to 1.65 million bpd in 2017, so its compliance with the cut agreement exceeded 100%. Like many oil-exporting countries, Angola’s revenues fell during the recent years of low oil prices. The higher price regime could help reverse this. However, production has declined further in recent months. According to OPEC, Angola’s crude production fell to 1.57 million bpd during 1Q18.
OPEC lists Angola’s estimated proved oil reserves at 9.52 million bbls. This is the fourth-largest reserve base in Africa, following Libya, Nigeria, and Algeria.
Angola has one refinery at Luanda, owned and operated by Sonangol, the national oil company. Sonangol lists the capacity at 2.8 million tpy, or approximately 57 000 bpd. The refinery was inaugurated in 1958. It was expanded and repaired during the many years of civil war, but it often operates at low rates of utilisation. Angola routinely imports refined product for its domestic needs, sometimes up to 80% of its demand. The country plans to build two new refineries in Lobito and Cabinda. Sonangol reported that it had received 28 proposals from a range of international firms and consortia to build the refineries.
CameroonCameroon possesses oil reserves of 200 million bbls. Its crude production was listed at 93 300 bpd in 2016 and an estimated 90 000 bpd in 2017.1 In early 2018, production began at Cameroon’s first floating LNG (FLNG) unit, Hilli Episeyo, developed with Perenco and Golar.
Cameroon’s sole refinery in Cape Limboh, Limbe, is run by Societe Nationale de Raffinage (Sonara) with 42 000 bpd capacity. In 2017, Sonara hired a French consortium to modernise and expand effluent treatment at the refinery. In April 2018, the refinery went into technical shutdown to undertake modernisation. The capacity will be raised from the current 2.1 million tpy (42 000 bpd) to 3.5 million tpy (70 000 bpd).
ChadChad is dependent on petroleum as its only source of commercial fossil energy. Oil reserves are reasonably abundant, listed at 1.5 billion bbls.1 No new reserves have been added for many years. Production was estimated at 98 000 bpd in 2017, down from 150 000 bpd a decade prior. Chad is land-locked, and most of its oil output is exported via the Chad-Cameroon Pipeline, a 660-mile pipeline connecting oilfields in southern Chad with a floating storage facility near Kribi in Cameroon. The pipeline opened in 2003, but has been controversial with allegations of corruption, diversion of funds, environmental degradation, and negative impacts on indigenous communities.
China was the key investor in Chad’s oil exploration, development and processing sector, via its Chinese National
Figure 1. Sub-Saharan Africa oil production, ‘000 bpd (source: BP).
Table 1. Estimated proved oil reserves in the Sub-Saharan African countries (sources: Oil and Gas Journal and BP)Country Estimated proved oil reserves,
1000 bbls, January 2018
Angola 9 523 000
Benin 8000
Cameroon 200 000
Chad 1 500 000
Rep. of Congo (Zaire) 180 000
Rep. of Congo (Brazzaville) 1 600 000
Equatorial Guinea 1 100 000
Gabon 2 000 000
Ghana 660 000
Ivory Coast 100 000
Niger 150 000
Nigeria 37 453 000
S. Sudan (BP) 3 500 000
Sudan (BP) 1 500 000
Uganda 2 500 000
Sub-Saharan Africa 61 974
World 1 651 849 737
Percentage in Sub-Saharan Africa
3.8%
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Petroleum Co. (CNPC). In partnership with the Chadian National Hydrocarbon Co., CNPC built a 20 000 bpd refinery north of N’Djamena, completed in 2011. However, in 2012, the Chadian government shut down operations, reportedly because CNPC refused to produce fuel at the government-set price.
CongoThe Republic of the Congo has proved oil reserves of 1.6 billion bbls. The country has a mature oil industry, confronted with declining production. A series of offshore oil finds is now reversing the downward trend. Production in 2017 was estimated at 303 000 bpd2, and it is forecast to grow to 350 000 bpd in 2018. The higher production volumes and higher global prices will provide welcome relief to the country’s economy.
Congo operates a single refinery of 21 000 bpd capacity at Pointe Noire, operated by Congolaise de Raffinage (CORAF). Refinery utilisation rates are low. The US Energy Information Administration (EIA) estimated total refinery output in 2010 was 13 800 bpd. The government has proposed privatising and upgrading the refinery, but the economics have not been favourable.
Equatorial GuineaEquatorial Guinea is estimated to possess 1.1 billion bbls of oil reserves. The country’s economy is heavily reliant upon oil and gas revenues, and it has been under pressure from declining production and, until recently, weak oil prices. Equatorial Guinea became the sixth African country to join OPEC when it became a full member in May 2017. According to OPEC, the country’s crude oil production fell from 185 000 bpd in 2015, to 164 000 bpd in 2016, and to 135 000 bpd in 2017. The recent strength in global oil prices is stimulating interest in oil development. Equatorial Guinea completed a licensing round in 2017 and announced seven winners. The government is optimistic about reversing the downward trend in production.
Equatorial Guinea relies on imported fuel. There have been plans to build a 20 000 bpd refinery at Mbini, but the economics have not been attractive.
The country is a significant exporter of natural gas in the form of LNG from its single LNG plant, Punta Europa, on Bioko Island, which was completed in 2007. LNG exports totalled 4.3 million m3 in 2016, which went to a variety of customers in Asia, Europe, the Americas, and the Middle East. The government hoped to build a second plant that would expand domestic production and incorporate natural gas supplies from Cameroon and Nigeria. The developer, Ophir Energy, is instead focused on building the Fortuna FLNG project.
GabonGabon is the fifth largest Sub-Saharan African oil producer with oil reserves listed at 2 billion bbls. Gabon’s oil industry is mature, and production has been declining. The country joined OPEC in 1975, left in 1995, and rejoined in 2016. Its oil production peaked at 365 000 bpd in 1996. It declined to 227 000 bpd in 2016, a loss of 137 000 bpd, but the government hopes to reverse this. In 2011, it established the Gabon Oil Co., a national oil company designed to expand the government’s role in the oil industry. The hydrocarbons law signed in 2014 authorises the NOC to take a 15% equity stake in all new projects. Several new offshore oil deposits have been discovered, and the government is optimistic that the recent increase in oil prices will reinvigorate the upstream sector.
Gabon operates a single refinery at Port-Gentil, run by Societe Gabonaise de Raffinage (Sogara). The refinery came onstream in 1967. Although its nameplate capacity was listed at 24 000 bpd, it rarely processes over 18 000 bpd, and at times its utilisation is even lower. The output is mainly low-value residual fuel oil. The Gabon Oil Co. is planning to become involved in the refining sector by signing a Memorandum of Understanding with Samsung Corp. to build a new 50 000 bpd refinery to replace the antiquated Sogara refinery.
GhanaGhana has a moderate oil reserves base of 660 million bbls. Production has been rising, boosted by new output from the Jubilee oil field, which was discovered in 2007 in the offshore area near the Mahogany and Teak fields. Oil output of 100 600 bpd in 2016 grew to an estimated 166 300 bpd in 2017.1
In 2017, field operator Tullow Oil reported that 89 600 bpd came from the Jubilee field. Technical problems have prevented the achievement of the 120 000 bpd target initially planned.
Ghana’s Tema refinery, commissioned in 1960, has a nameplate capacity of 45 000 bpd. It underwent a revamp that should have increased capacity to approximately 49 000 bpd and added a residual oil catalytic cracker (RCC). But maintenance was neglected for lack of funds, and the facility has deteriorated. General shutdown and maintenance were skipped in 2011, 2013, and 2015. An explosion shut down the refinery in 2017, and another forced shutdown occurred in January 2018, just weeks after it re-opened. The government is planning a new refinery to replace the Tema refinery, envisioned as a 150 000 bpd plant.
Ivory CoastThe Ivory Coast possesses a modest reserve base of 100 million bbls of oil. The country is actively promoting the
Table 2. Sub-Saharan Africa refinery capacities (sources: Oil and Gas Journal, company websites, trade press and World Bank)Country Crude capacity (bpd)
Angola 56 921
Cameroon 42 000
Chad 20 000
Rep. of Congo (Brazzaville) 21 000
Gabon 24 000
Ghana 45 000
Ivory Coast 71 000
Kenya 32 000
Nigeria 445 000
Tanzania 540
Total 757 461
Notes: Chad refinery currently not operating. Kenya refinery is operating as product terminal. Tanzania refinery is oriented toward lubrication production
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expansion of its hydrocarbon industry. It was roiled by two civil wars, the first from 2002 to 2007 and the second from 2010 to 2011. The current period of relative stability has given the country hopes of expanding its economic base. Petroci, the national oil company, proposes to double the country’s oil and gas output by 2020, and it has been seeking foreign investment to expand offshore oil and gas development. Tullow Oil, which has been active in the country for many years, recently acquired four new offshore licenses from Petroci. Petroci reported that oil production rose from approximately 30 000 bpd in 2015 to 53 000 bpd in 2016, and that the goal was to produce 200 000 boe by 2020. It has been estimated that crude production was 30 000 bpd in 2017.2
The Ivory Coast is the site of a relatively large refinery, a 70 000 bpd hydrocracking refinery at Abidjan, the economic capital and main port city. The refinery is run by Societe Ivoirienne de Raffinage (SIR). SIR has been achieving record-high output, and it provides fuel to several neighbouring countries. There were plans to build a second refinery of 60 000 bpd capacity, but these plans were postponed. This refinery was saddled with heavy debt, estimated to be over US$300 million, and the government was required to organise debt relief.
KenyaKenya is in the early stages of developing its oil industry and becoming an oil exporter. An international consortium led by Tullow Oil discovered commercial oil resources in the South Lokichar Basin, estimated at over 600 million bbls of recoverable oil. The consortium planned to produce between 60 000 bpd and 100 000 bpd of crude. In May 2018, Tullow announced that it had discovered additional oil deposits in the South Lokichar Basin. The company also believes commercial oil reserves exist in other basins, including the neighbouring Kerio Basin and the North Turkana Basin.
The government tried to stimulate oil production by presenting a Petroleum Exploration, Development and Production Bill in February 2018, but the bill was withdrawn for lack of support. In May 2018, the central government announced that it would try to break the deadlock by dropping budget allocations for the oil-rich counties which placed caps on the amount of revenue the local communities could receive.
Investments in petroleum development have been slowed by a lack of transport infrastructure. Initially, Kenya and Uganda had agreed to jointly build an export pipeline. The route would have begun in western Uganda in the oil-rich Albertine Graben area, travelled east to traverse Kenya’s South Lokichar Basin, and ended at Kenya’s northern Lamu Port. Kenya hoped to tie the pipeline project into a significant port development project as well. But Uganda subsequently announced a competing pipeline project that would carry its oil south and east via Tanzania. Kenya was forced to shift plans to build its own pipeline project. In the meantime, the government announced that it had produced and stored 70 000 bbls of oil, and that it was launching a pilot project to test the viability of using trucks to transport the oil to Mombasa for export by tanker.
Kenya also had plans to expand its role as a regional refining centre. Its refinery at Mombasa was the only refinery in the region, and it provided product for neighbouring countries including Tanzania, Uganda, Rwanda, Burundi, and South Sudan. India’s Essar Energy Overseas group purchased a
stake in the refinery in 2009, with the intention of expanding and upgrading. The capacity was listed at 1.6 million tpy (approximately 32 000 bpd), and the plan was to expand to 4 million tpy (approximately 80 000 bpd). However, subsequent economic analysis indicated that the expansion and upgrade would not be cost-effective. The refinery was idled in 2013, and the site is used as an import terminal. Essar pulled out of the deal and sold its stake in the refinery to the Kenyan government.
NigeriaNigeria is the most populous country in Africa, with over 181 million inhabitants. Its estimated proved oil reserves of 37.4 billion bbls are the largest in Sub-Saharan Africa. Nigeria is the largest oil producer in Africa, with production listed at 1.66 million bpd in 2017, according to OPEC. Nigeria has been an OPEC member since 1971. It is a major focal point for Sub-Saharan Africa, and many international companies maintain a presence there. But it is also known as a country where doing business can be difficult.
Most of the country’s oil industry is located offshore in the Bight of Benin and in the southern Niger Delta region. Civil strife in this area has caused repeated supply outages. Many citizens believe that Nigeria’s oil wealth is not flowing to the people. Strikes and protests are frequent. While the oil and gas industries provide important employment, local workers have suffered from lack of security. Militant groups have attacked oil pipelines and other infrastructure, cutting off supplies and forcing producers to declare force majeure. Outages have been in the range of 200 000 – 300 000 bpd and higher. Some international oil companies have sold assets and evacuated staff. Moreover, some of the damage has caused oil spills and environmental hazards.
Because of internal unrest and unpredictable output, Nigeria was allowed an exemption from the OPEC production cut agreement that took force in January 2017. At that time, Nigeria’s official baseline production was 1.58 million bpd, well below its peak. Production recovered in 2017, reaching 1.86 million bpd in December. This prolonged the supply glut, but with 2018 prices now strengthening and potential for declines in Iran and Venezuela, OPEC may renegotiate its production caps.
Despite new oil finds, however, it is not clear that Nigerian output could reach its prior peak levels anytime soon. Some of the new developments serve only to replace declines in mature fields, and other developments have been postponed repeatedly because of regulatory uncertainty. Nigeria put forth a Petroleum Industry Bill (PIB) in 2008 that would change many facets of the regulatory environment, possibly making some projects commercially infeasible. Although a decade has passed, the regulations have not been finalised.
Nigeria has a major LNG plant at Bonny Island. It is Africa’s largest exporter of LNG, and the fourth-largest LNG exporter in the world in 2016. Exports totalled 23.7 million m3. There are plans for another LNG project, known as Brass LNG.
Natural gas is also converted to liquid fuels at the Escravos gas-to-liquids (GTL) plant, which came onstream in 2014, close to a decade behind schedule. At full capacity, Escravos GTL can convert 325 million ft3/d of natural gas to 33 200 bpd of liquids, chiefly GTL diesel.
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Nigeria has four refineries: Port Harcourt I, Port Harcourt II, Warri, and Kaduna. Three of these are catalytic cracking refineries. All four have catalytic reformers for octane provision, and two of the cat crackers have associated alkylation units. Total capacity is listed at approximately 424 000 bpd. However, utilisation rates are low – sometimes below 20%. The refineries have deteriorated, and at times they are starved for crude oil feedstock because of pipeline sabotage and theft. The Nigerian National Petroleum Corp. (NNPC) has been seeking private partners to revamp the refineries. In the meantime, the country has grown dependent on imported fuels.
Nigeria is now working to build the Dangote Project, which will be an integrated petrochemical-refinery complex. Costs are estimated at US$11 billion. It will include a massive 650 000 bpd refinery, equipped with mild hydrocracking, residual oil catalytic cracking, alkylation, and ample hydrodesulfurisation capacity. The output will conform to Euro 5 quality standards. The complex will also produce fertilizer and polypropylene. The refinery is scheduled for completion in 2019. When completed, Nigeria should be fully self-sufficient in refined product, and will be able to export fuel as well.
TanzaniaTanzania is not an oil producer, but it is a natural gas producer with ambitions to become an LNG exporter.
In the 1960s, Tanzania had a 12 000 bpd refinery, built by Italian partners. In 1991, the refinery was closed. It was then estimated to be running at 60% utilisation. It was converted to an oil terminal. In 2016, Tanzania inaugurated a heavy oil refinery at Zinga, Bagamoyo District. The refinery produces 27 000 tpy of oil products (540 bpd) and 10 000 tpy of lubricating oils (200 bpd).
UgandaUganda is not an oil producer or a refiner, though it has ambitious plans for both upstream and downstream development. The country successfully identified commercially feasible oil resources. Oil and Gas Journal (OGJ) reported Ugandan reserves at zero in 2010, jumping to 1 billion bbls in 2011, and raising to 2.5 billion bbls in 2013. Exploration then faltered, and the OGJ reserves picture has not changed since then.
The Ugandan government, however, believes that its Albertine Graben area contains 6.5 billion bbls of recoverable oil, and it hopes to start commercial production by 2020. Plans have not been finalised concerning oilfield development. The pipeline route has also has shifted from one which initially
was to go through Kenya to one that traverses Tanzania. On the upstream side, the government is set to decide on the development of its Kingfisher oilfield in 2018. The China National Offshore Oil Corp. (CNOOC) purchased interest in the field from Tullow Oil in 2012. CNOOC plans to bring production online within three years of government approval. If the government finalises the deal this year, production could come onstream in 2021, reaching 40 000 bpd.
Uganda has long hoped to build a refinery, with Hoima being the chosen site. The refinery plan was backed by Russian interests initially, but negotiations fell through in 2017. Progress was made on the refinery plan in early 2018, when a ‘Special Purpose Vehicle’ (SPV) consortium known as the Albertine Graben Refinery Consortium (AGRC) won a bid to build, operate, and partly own the proposed 60 000 bpd refinery. The consortium includes companies from Italy and Mauritius, plus the Uganda National Oil Co.
ConclusionThe Sub-Saharan Africa region cuts across a wide swath of territory, with diverse terrain, resources, and countries. Many countries in this region have long-established oil and gas industries, and others possess resources that they plan to develop. The World Bank reports that economic growth and activity are recovering, after a sharp slowdown in 2015 – 2016. Commodity exporters are also benefitting from an increase in global prices. This is especially visible in the oil sector. Spot prices for Brent Crude averaged US$108.56/bbl in 2013. This collapsed to US$43.64/bbl in 2016. Crude prices are now on an upswing, largely because of the OPEC production cut agreement and growth in global demand. Brent spot prices rose above US$68/bbl during the January – April 2018 period, and NYMEX futures prices have topped the US$70/bbl mark in recent trading.
The higher price regime has raised interest in oil exploration and development, and many international firms are involved in regional projects. Oil production could rise in both OPEC Africa and some smaller producing countries. Refinery projects continue to be planned, ranging from small modernisation projects to the mega-project in Nigeria, which is envisioned as a 650 000 bpd refinery, integrated with petrochemical and fertilizer plants. There is abundant opportunity, with the caveat that investment capital is always limited.
Reference1. Unless otherwise noted, Oil and Gas Journal (OGJ) is the source of the
reserves data used in this article. 2. Oil and Gas Journal (OGJ).
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