Nigerian energy company, Aiteo Eastern E&P Company Limited, has signed an agreement with the Mozambican national petroleum company, PETROMOC, to construct a refinery.

Local newspapers in the foreign nation report that Mozambique will now have a refinery with the capacity to produce 200,000 barrels of fuel per day.

According to the President of Mozambique, Daniel Chapo, the project should be implemented in 24 months. The agreement was signed between PETROMOC and Aiteo for the construction of the refinery.

“This project, to be implemented over a maximum period of 24 months, will increase storage capacity by 160,000 metric tonnes for liquid fuels and 24,000 metric tonnes for Liquefied Petroleum Gas.”

“This is a transformative project that will position Mozambique as a relevant player in the liquid fuel value chain, with a positive impact on job creation, especially for our youth. The refinery will produce gasoline, diesel, naphtha, and Jet A1 with the ambition of conquering the regional market.

“These milestones reflect not only the robustness of our reserves, but above all, the environment of credibility, security, and reform that we are consolidating in attracting the private sector to boost our economy,” said the Head of State during the opening of the Mozambique mining and energy conference recently.

According to Quantum Commodity Intelligence, once completed, the refinery could potentially reshape the oil product trade flows in Africa, as Mozambique currently relies solely on imported supply.

The refinery is expected to mark another watershed moment for the African energy market after the Dangote refinery turned the West African country from a net importer into a key regional exporter.

Like Nigeria before current refining capacity, it was reported that refined oil products are the most imported in Mozambique, with India being the top supplier, followed by the United Arab Emirates, Bahrain, Saudi Arabia, and Malaysia.

However, the project timeline is considered challenging as an oil refinery would typically take between three and eight years to build.

Meanwhile, President Chapo also unveiled a new cross-border pipeline project connecting the port city of Beira to the inland neighbour, Zambia.

The pipeline is expected to be built in four years and will be able to transport 3.5 million MT of petroleum products annually. It will significantly reduce road traffic on National Road Number 6, contributing to road safety and logistical efficiency in Mozambique.