At 5.55% refining capacity, Nigeria awaits Dangote’s refinery completion




Nigeria’s four refineries are operating at just 5.55% of their combined nameplate capacity of around 445,000 barrels per day (b/d), according to data released in late May by the Nigerian National Petroleum Corporation (NNPC), underlining that the oil-rich nation still relies heavily on imports for its fuel needs.

The operating capacity is the highest that the four refineries have reached in six months, the NNPC data show. 

“The lower operational performance recorded is attributed to the ongoing revamping of the refineries, which is expected to further enhance capacity utilisation when completed,” NNPC said.

Nigeria’s refineries, which include the northern Kaduna refinery, the Warri refinery, and two plants located in Port Harcourt, have not operated beyond a quarter of their nameplate capacity for some time, mainly due to sabotage attacks on pipelines carrying crude to the plants as well as technical problems after years of neglect. 

NNPC announced in March that it had secured the service of Italy’s Maire Tecnimont, to handle the overhaul of the 210,000 b/d Port Harcourt refinery complex, with an oil major, Eni, appointed as a technical adviser.

Indeed, the country will need a refining capacity of 1.52 million BPD in order to meet its fuel demand by 2025, according to NNPC.

The reality is that Nigeria currently has operating refineries with a total processing capacity of 445,000 bpd, and it often struggles to keep them at full-capacity operation because of underinvestment in maintenance.

The country aims to triple the refining capacity by 2025 to move closer to becoming self-reliant in fuels.

According to NNPC, the 650,000-bpd refinery that Africa’s richest man Aliko Dangote, is financing will secure most of the refinery capacity increase. 

However, the refinery may not reach full capacity until the middle of 2020, which would be someone and a half years later than the originally planned startup date.

The NNPC had on Sunday said it awarded crude-for-fuel swap deals to 15 consortia and/or companies.
   
Units of BP and Total, as well as commodity traders Vitol, Gunvor, Trafigura, and Mercuria, were awarded contracts, most of them in consortia with local Nigerian firms.
  
The contracts in the so-called Direct Sale of Crude Oil and Direct Purchase of Petroleum Products (DSDP) arrangement will run for a year effective October 1, 2019, through September 30, 2020.
   
“Under the DSDP arrangement, the under listed fifteen (15) consortia/companies shall over the contract period, offtake crude oil and in return, deliver corresponding petroleum products of equivalent value to NNPC, subject to the terms of the agreement,” NNPC said in the statement.

THE GUARDIAN