How decentralisation can support the expansion of Africa’s refining sector

by Souheil Abboud, Managing Director, VFuels LLC.

Africa’s refining capacity has traditionally been concentrated around key hubs in Algeria, Egypt, South Africa and Nigeria. Combined, these four countries represent almost 75% of Africa’s installed refining capacity thanks to large-scale refineries that operate with various levels of reliability.

However, Nigeria and South Africa have lost their status of refining hubs in recent years. Nigeria because of under-investment and lack of maintenance in its three state-owned refineries, and South Africa because of the gradual shut-down or conversion of its own facilities.

As most African nations seek to secure their fuel supplies by building their own refineries, modular technologies and designs have been on the rise. While the trend first emerged out of Nigeria, it has quickly spread across the continent and modular refineries are now being built from West to Southern Africa.

Modular technology solutions make it possible to address several critical challenges and needs of emerging markets, especially in Africa. They notably offer clients the opportunity to set up a refinery in approximately 13+ months from inception to start of production. This compares favorably with the 3+ years for a traditional “stickbuilt” refinery. Such decentralized assets also avoid a lot of the regular land, infrastructure, and logistics challenges associated with larger projects.

Modular refineries have a quick return on investment (RoI) of approximately 2 years, enabling developers and their investors the ability to recoup their invested capital sooner. They offer a lot of flexibility when it comes to capex and opex, and the ability to gradually invest in additional modules to support capacity expansion over time.

Finally, the modular refining technology makes project’s development simple and efficient. It notably requires less manpower and direct supervision, which in turn provides significant costs savings and reduced operating expenses.

At VFuels, we have developed a solid track record of executing modular refinery projects for African clients. These include the 5,000 bpd Waltersmith refinery in Nigeria, the 10,000 bpd Conex refinery in Liberia, and the 30,000 bpd Cabinda refinery in Angola where factory acceptance tests (FAT) were completed in May 2022.

As we continue to support Africa’s energy security agenda with modular refinery solutions, we also believe in the sustainability of African infrastructure assets. Earlier this year, we entered into a joint venture agreement with Earth Technologies to develop and install clean energy infrastructure for African oil & gas assets, including refineries. We also set up a collaboration with EMCO Engineering to develop water treatment facilities and deploy controls and digital solutions across various sectors in Africa.

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