National Oil Ethiopia (NOC) disclosed it plans to build refinery in a decade in order to meet the growing demand for refined products in the region whose economy is growing fast. The refinery is expected to cost 5 billion USD.

According to Reuters, a refinery could compete with imports from India, the Gulf and beyond, and also help African countries extract more value from their own oil discoveries.

After gas is discovered in Tanzania and Mozambique and oil is found in Uganda and Kenya, made East Africa the new frontier for global hydrocarbon hunt.

NOC’s chief executive officer, Tadesse Tilahun, said the final decision to build a refinery with a capacity of producing 200,000 to 300,000 barrels a day is 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," the CEO said. "I would assume in the next 10 years we should have the refinery on the ground."

Nonetheless, the CEO refrained from commenting on how the project is going to be financed. Yet he has previously said other private and public investors would need to come on board.

According to Reuters Ethiopia is one of Africa’s fastest growing economies and it has been growing eight percent a year for over a decade. The nation is the second most populous country in Africa and the economy is driven mainly by state led investment.

The CEO also commented NOC plans to almost double its coal import and take it to 500,000 tons a year by 2017. The company imports coal from South Africa and supplies it to cement manufacturers.

Source: African Reuters