Sénégal: SAR Yamata Signs MoU for Deuxième Raffinerie, Mbao Modernization

• Senegal's Société africaine de raffinage (SAR) and Turkey's Yamata signed an MoU for a new 4-million-ton-per-year refinery and modernization of the existing Mbao facility.
• The new refinery project is estimated to cost $2 billion to $3 billion, while the modernization will cost $300 million to $500 million.
• Yamata will handle engineering, procurement, construction, and financing for the projects, notably without a sovereign guarantee from the Senegalese state.
• The initiative aims to meet Senegal's full domestic petroleum needs, generate surpluses for the West African market, and create approximately 15,000 direct jobs with a focus on local content.
• President Bassirou Diomaye Faye attended the signing, highlighting the project's importance for Senegal's energy sovereignty as it became an oil and gas producer in 2024.

These significant investments by the Société africaine de raffinage and Yamata are viewed as a pivotal stride towards achieving the energy sovereignty championed by President Bassirou Diomaye Faye.

The Société africaine de raffinage (SAR) and Turkish firm Yamata recently formalized a significant partnership, signing a memorandum of understanding (MoU) in New York. This agreement, announced by the Senegalese presidency, outlines plans for the construction of a second oil refinery in Senegal and the comprehensive modernization of the nation's existing petroleum product supply facility. The signing ceremony, which took place on a Wednesday, was attended by President Bassirou Diomaye Faye, underscoring the strategic importance of the initiative.

Central to the accord is the development of a new refinery designed to process crude oil extracted within Senegal, boasting an annual capacity of 4 million tons. This ambitious undertaking represents a substantial financial commitment, with estimated investments ranging from $2 billion to $3 billion, equivalent to approximately 1,150 billion to 1,730 billion CFA francs. The MoU was officially signed by Mamadou Abib Diop, the Director General of SAR, and Cengiz Duyar, the President and CEO of Yamata.

In addition to the new facility, the partnership also encompasses a significant upgrade to SAR's current refinery, situated in Mbao, within the Dakar region. This modernization effort carries an estimated budget of $300 million to $500 million, or roughly 170 billion to 290 billion CFA francs. This dual approach aims to bolster Senegal's refining capabilities significantly, addressing critical infrastructure needs for the nation's energy future.

The Turkish company, Yamata, is slated to assume a comprehensive role in the project, covering engineering, procurement, construction (EPC), and crucial financing aspects. This financial backing will be mobilized through Yamata's network of financial partners, notably without requiring a sovereign guarantee from the Senegalese state. The agreement, executed on the sidelines of the United Nations General Assembly, also stipulates the completion of detailed engineering studies, a critical precursor to the commencement of construction for the new Sénégal deuxième raffinerie SAR Yamata.

This development comes as Senegal officially became an oil and gas producer in 2024, yet it continues to rely heavily on imports for nearly all its hydrocarbon needs. The strategic move to expand domestic refining capacity, including the modernisation raffinerie Mbao, is therefore a direct response to this paradox, aiming to transform the nation's energy landscape and reduce external dependency.

The planned refinery is projected to fully satisfy Senegal's national demand for petroleum products, with the added benefit of generating surpluses for the burgeoning West African market. This strategic positioning is expected to elevate Senegal to a key supplier of refined products for several countries across the region, addressing the increasing demand for such commodities. The Senegalese presidency highlighted that a refinery of this scale serves as a vital source of inputs for diverse sectors, including agriculture, transportation, industry, and construction, making the projet raffinerie pétrole Sénégal a cornerstone of economic development.

Beyond direct refining, the partnership incorporates ancillary projects focused on the local processing of petroleum derivatives and the establishment of new industrial value chains. This initiative is characterized as a "catalytic project," designed to attract investments and leverage the expertise of Senegalese enterprises at every stage. The investments outlined in the SAR-Yamata agreement are anticipated to create approximately 15,000 direct jobs in fields such as engineering, maintenance, and industrial logistics. A substantial portion of these employment opportunities will be specifically allocated to Sénégal contenu local énergie, prioritizing the Senegalese workforce.

These significant investments by the Société africaine de raffinage and Yamata are viewed as a pivotal stride towards achieving the energy sovereignty championed by President Bassirou Diomaye Faye. The projet raffinerie pétrole Sénégal aligns with a broader national vision to enhance self-sufficiency and economic independence in the energy sector, marking a major investment énergétique Sénégal.

This significant infrastructure project, involving a foreign investor and no sovereign guarantee, signals major opportunities and regulatory considerations in Senegal's energy sector. Lawyers specializing in project finance, energy law, local content requirements, and environmental permitting should monitor its progress for potential client advisory roles or compliance implications related to large-scale industrial development.

Source: Original reporting via the Senegalese Presidency