The downstream market is dynamic in Africa and continues to evolve and become more transparent throughout the supply chain, says African energy specialist CITAC Africa executive director Gary Still.

He told the annual African Refiners and Distributors Association (ARA) conference, in Cape Town, that, while energy would be increasingly retrieved from different sources, such as gas and renewables, the oil share was forecast to remain unchanged in percentage terms.

CITAC Africa anticipates that additions to Africa’s refining capacity will not cover the shortfall in demand.

Still told delegates about several developments in refining capacity in Africa. These included upgraded units in several refineries in Egypt and the expansion of three refineries in Algeria. He also highlighted Dangote Group’s investment in Nigeria. Dangote was building the world’s largest greenfield refinery, which would churn out 600 000 bbl/d of oil.

Still pointed out that there were also investments in Cameroon to produce a new vacuum unit, while there was talk of a new refinery in Uganda and a possibility that the Libito refinery, in Angola, would be revived.

Despite upgrades, the appetite for investing in refineries is not as strong as hoped.

“We fear that private equity does not have enough confidence in bankrolling refinery projects. That’s not only in Africa . . . it’s global.”

Despite this, he described the situation in Africa as quite resilient.

“The momentum is there. There are survivors in niche areas with the right political environment.”

He said West Africa presented a complex downstream environment.

“There is a patchwork of different specs, with seven permissible levels of sulphur.”

He said aromatics, polycyclic aromatic hydrocarbons and olefins could be the next targets, following benzene.

CITAC Africa has also seen a sharper focus on cleaner fuels. Still said African countries were showing an increasing interest in liquefied petroleum gas (LPG), with demand likely to double within the next ten years in sub-Saharan Africa.

He said LPG demand was boosted by the removal of kerosene subsidies, while LPG could easily be used in an urban environment.

He outlined several challenges, including the extra storage needed in future and keeping track of and retrieving gas cylinders.

While there were increased investments in pipelines and rail, Still said, African countries were “catching up with market developments and growth rather than leading [them]”.

He pointed out encouraging berth modifications and rehabilitation projects in Lagos and Dakar, in particular.