Fuel: Africa’s Annual Refining Capacity To Reach 77.6m Metric Tons –ARDA

Amidst calls for sustainable transition to cleaner fuels, the African Refiners and Distributors Association (ARDA) yesterday said refinery output on the continent will peak in 2027 at 77.6 million metric tons per year.

Speaking in Cairo, Egypt at the Second High-Level Organisation of Petroleum Exporting Countries (OPEC)-Africa Dialogue Meetings during which OPEC, African Energy Commission (part of African Union), African Petroleum Producers Organization (APPO) and ARDA engaged on the need for a robust, intra-African oil and gas industry, executive secretary of ARDA, Anibor Kragha, said there would be rapid growth in fuel demand in Africa in the next two decades.

Pegged on the backdrop of rising population, Kragha however warned that public health challenges may result unless cleaner fuel is prioritised.

According to him, import requirements for transport fuels will continue to grow in sub-Saharan Africa, making the region the world’s largest importer by 2030.

Kragha disclosed that the continent would in the next four years see a peak increase of 52.7 million metric tons compared to African refinery capacity of 2019 reflecting an increase of about 212 per cent.

“Higher peak output reflects new refineries in Angola and Guinea and restarts of refineries in Cameroon and South Africa (Sapref). Subsequent closures driven by the push for cleaner fuel specifications will be offset by opening of the new refinery in Uganda in 2028,” Kragha stated.

Kragha also noted that Africa’s growing energy demands must be met with cleaner fuels to address pollution and public health issues.  He said separate implementation strategies were needed for cleaner fuels, lower-carbon power generation and sustainable renewable energy solutions in Africa.  He disclosed further that a measured, decade-by-decade Sustainable Finance Plan is urgently needed on the continent to ensure investments are made to deliver a unique African Energy Transition Plan.

The ARDA executive secretary said coordinated refinery upgrade and supply and distribution infrastructure projects are critical, adding that ARDA remained committed to securing project financing for strategic opportunities in African Downstream oil sector, especially the Africa LPG Sector Development Fund and the Refinery Upgrades for Clean Fuels, Storage & Distribution Infrastructure and Petrochemicals Projects Fund.

Kragha disclosed that a coordinated strategy for storage and distribution investments would be required to deliver Energy Transition Plan(s) for Africa, adding that there was need for regional and pan-African pipelines to connect the continent’s energy centers as well as deep water ports to reduce congestion and ultimately reduce costs associated with petroleum products imports.

Kragha, who believes that technology could address oil and gas emissions said:  “Inclusive and equitable energy transition roadmap must be deployed that captures priorities, challenges and perspectives of Africa’s low-emitting countries.  “The roadmap must not prioritize near-term emissions reductions (with relatively little climate benefits) over support for economic development and energy transformation.”, he said.

Meanwhile, OPEC stated that the second high level meeting and second technical meeting of the OPEC-Africa Energy Dialogue involved leading energy partners from across the African continent.  The Secretary General of OPEC, Haitham Al-Ghais said: “The opportunities for the continent will be significant in the years ahead, but there will undoubtedly be a great number of challenges in store as this industry continues to evolve towards a lower-carbon future.”

Secretary general of African Petroleum Producers’ Organization (APPO),  Dr. Omar Farouk Ibrahim, speaking at the event said the challenge of energy transition for Africa is a lot more daunting. He pointed out that a study conducted by APPO on the future of the oil and gas industry in Africa in light of the energy transition identified three imminent challenges (funding, technology and markets) that African oil and gas producing countries must address if they are not to lose the 125 billion barrels of crude oil and over 550 trillion cubic feet of gas reserves located on the continent.