Ethiopian oil marketer sees $5 billion refinery within 10 years

Ethiopia’s leading private oil marketer, National Oil, plans to build a $5 billion refinery within ten years to meet the growing demand for refined products in a region experiencing fast economic growth.

A refinery could compete with imports from India, the Gulf and also help African countries extract more value from their own oil discoveries.

Eastern Africa is the latest frontier in the global hydrocarbon hunt after gas discoveries off Tanzania and Mozambique and oil finds in Uganda and Kenya.

Tadesse Tilahun, the chief executive of National Oil Ethiopia, said the final decision to build a refinery producing between 200,000 to 300,000 barrels per day was yet to be taken.

“It is a firm plan because oil demand is growing in Ethiopia… about 10 percent each year from the annual consumption of 3 million cubic metres and in the next 10 years we expect that to double,” he said.

“I would assume in the next 10 years we should have the refinery on the ground,” he said.

National Oil’s shareholders include Saudi billionaire Mohammed Hussein Al Amoudi, whose investment portfolio in construction, gold, hotels and energy has helped amass an estimated fortune of over $10 billion, according to Forbes.

Tadesse said National Oil, which also runs cement factories in Ethiopia, plans to almost double its coal imports to 500,000 tonnes a year from South Africa by 2017 to generate power for the cement-making plants.

Coal is used as an energy source in cement production, with about 200 kg of coal needed to produce one tonne of cement, according to the World Coal Association.