US $500m Oil refinery to be constructed in South Sudan

0
3462
US $500m Oil refinery to be constructed in South Sudan

Trinity Energy Ltd,  South Sudan’s oil marketing giant, has announced plans to develop a crude oil refinery worth US $500m to serve the region with refined petroleum products.

The refinery to be built by American firm Chemex, will be located at Paloch in the oil-rich Upper Nile State. Feasibility study and the designs for the proposed refinery have already been concluded with Afreximbank together other regional banks operating in Juba expected to provide financing.

“Various discussions are ongoing with financiers for the various facets of our business. We have opted for segmented approach so that we can kick off with the low-hanging opportunities such as our working capital requirements as we work our way towards financing for the larger projects like the refinery,” said the firm’s chief executive Robert Mdeza.

Increasing oil production

The refinery upon completion is expected to produce 40,000 barrels per day (bpd), with the potential of expanding capacity to 200,000bpd. It will also have petroleum storage facilities at Nesitu, in the south of the country. The facility is expected to be operational in two to three years, with plans to start distribution of refined petroleum products to Kenya, Uganda, Tanzania and DR Congo by road owing to the absence of railway and pipeline connectivity between these countries.

READ: WEIR Oil & Gas division up for sale at US$405m

South Sudan has the third-largest oil reserves on the continent after Libya and Nigeria, estimated at 3.5 billion barrels, with much of it yet to explored. The country is seeking to increase crude oil production to pre-conflict levels of 350,000bpd, which is expected to significantly contribute to economic growth and sustainability.

The firm, which controls close to 40% of the South Sudanese oil market will in addition the company will inject US $10m worth of new investments in its Kenyan operations. Trinity Energy Ltd supplies substantial volumes of refined products to South Sudan, effectively stabilising domestic supply and demand for refined oil products.

The construction of the refinery in Paloch is expected to strengthen the firm’s bid of expanding its operations across the East and Central African region through a combination of acquisitions and greenfield investments as part of its five-year (2020-2024) growth and expansion plan.