Mozambique to build largest refinery in southern Africa

Mozambique’s state-owned oil company, Petromoc, has entered a strategic deal with a Nigerian energy firm called Aiteo to develop an oil refinery with a capacity to reach 240,000 barrels-per-day 

The agreement is a two-way blessing as it not only attracts foreign investments for Mozambique in strategic sectors, but also pushes Aiteo to a further influential position as a local company beyond its Nigerian base.

Signed during a formal ceremony chaired by the Mozambican President Daniel Chapo, the agreement will advance energy independence for the country. It will boost fuel supply security, facilitating the construction of one of the largest refineries in southern Africa, and the Southern African Development Community (SADC). 

The engineering procurement and construction activities for the refinery will be covered by an American firm called Deerfield Energy Services LLC. The refinery will be developed in a phased manner with an initial aim to install an 80,000 bpd processing unit within a two-year time frame, and gradually scaled up to the maximum capacity.

While the project promises several benefits, the financial, environmental compliance and execution timelines-based risks involved needs consideration. When ready for operation, the plant will be able to produce petrol, diesel, jet fuel and naptha for domestic as well as regional use. 

Calling the project a 'milestone' for its employment generation possibilities, Ransome Owan, Aiteo's group managing director for infrastructure, said, “It will reduce import reliance, create jobs, and lay the foundation for Mozambique to become a leading hub in the region’s downstream energy sector.”

Mozambique is committed to an extensive industrial strategy to advance energy access, economic diversification, and infrastructure development. The refinery falls in line with this strategy as it will ensure greater access to cleaner fuels and advance clean cooking initiatives with the easy availability of liquefied petroleum gas (LPG) distribution.