EVEN IF A number of new African refinery projects and upgrades materialise, they will fail to halt the rapidly growing gap between refinery output and demand for clean products, according to international oil industry consultancy CITAC Africa LLP, which specialises in the African market.
Under CITAC's "best case" scenario, which assumes the addition of 810,000 bpd (40mn mt per year) of new refining capacity by 2020, Africa would still be short of over 1.5mn bpd (69mn mt per year). The continent's current clean products shortfall is 900,000 bpd (41mn mt per year).
There will be a shortage of as much as 1.9mn bpd (87mn mt per year) of clean products by 2020 if refinery output remains at current levels.
Under both scenarios, Sub-Saharan Africa will account for the majority of the shortfall. This is partly because Sub-Saharan African demand growth will significantly exceed average global demand growth over the next decade and average 4.2 per cent per year. There are a number of unknowns associated with North African demand growth over this and next year, but even with political turmoil in some of the North African states, CITAC forecasts average annual growth of about 1.6 per cent per year.
The above scenarios are derived from CITAC Africa LLP's latest supply/demand review, which emphasizes the urgent need for investment in infrastructure to mitigate the enormous increase in consumption and import volumes.
"In order for this logistical challenge to be met, governments and regulators need to work with the oil industry to devise a common strategy for implementing the required infrastructure development," said CITAC Partner and Executive Director David Bleasdale.
At all stages of developing the necessary infrastructure to meet the projected demand increase, supply chain efficiency is of paramount importance. Investment in new offshore discharge facilities (SBMs etc.), port dredging to increase acceptable vessel sizes, more powerful equipment and pumps to increase product pumping times, coastal storage to ease transit, as well as pipelines, road and rail system improvements to reduce the number of trucks on the roads, are every bit as crucial as the planned refinery investments.
