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Cameroon revamps 30-year-old refinery with $703m .

posted by www.equatorialguineaonline.com

Cameroon is on track to expand and modernise its Limbe refinery, with all funding for the first phase of the project in place, a senior official at state-owned refiner SONARA has told Reuters.

SONARA, which has been operational since 1981, has so far only refined light crude oil imported from Nigeria, Equatorial Guinea and Angola. Cameroon has pumped oil since the mid-1970s but it produces heavy crude that it has been unable to refine. Around 1 million tons of SONARA’s production is consumed locally, with the rest exported to other African nations, the United States and Europe.

Various African refining projects have been delayed or scrapped altogether, as governments failed to source the necessary funds. But Godfrey Yenwo Molo, in charge of projects at SONARA, said this was not the case for Cameroon. “The financing package is in place,” he told Reuters on the sidelines of an African Refiners Association meeting.

Molo said SONARA’s operational and financial track record, fast rising demand for products in the region and the fact that many other projects on the continent had failed to take off, had helped it source funds from local and international banks. He said the first phase, due to be completed in 2013, was financed using pre-payments from future off-takers, including commodity traders.

The first phase of the project, estimated to cost 130 billion CFA francs ($280 million), includes the revamp of the crude distillation unit, addition of a new vacuum distillation unit, new catalytic reformer and a power plant.

A second phase, estimated at 300 million euros ($423 million), will include installation of a hydrocracker. “If we sign the financing conventions next month (for the second phase), we should start the hydrocracker by 2014 or 2015, more 2014 than 2015,” he said. The upgrades will raise the refinery’s capacity to 3.5 million tons from 2.1 million tons, and allow the refinery to process heavy local crude.

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