Nigeria set to build two condensate refineries, despite $60 million spent in refurbishing “old refineries” since 2015— 2mins read
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ON Monday, the Nigerian National Petroleum Corporation, NNPC announced it was set to establish two new condensate refineries with a production capacity of 200,000 barrels per day in a bid to boost Nigeria’s refining capacity.
Mele Kyari, Group Managing Director, GMD of the NNPC in a statement released by the oil firm in Abuja revealed when the project is completed, the condensate refineries would put Nigeria in the frontline of top exporters of petroleum products.
“Our objective is to make Nigeria a net exporter of petroleum products and you can only achieve that by complementing each other, both the public and the private sector.”
Condensate refineries primarily refine condensate, not crude oil. They often produce one product, mostly Premium Motor Spirit, also known as petrol.
He said the export of petroleum products from the condensate refineries will be achieved together with the expected 650,000 barrels per day from the Dangote Refinery when it is completed.
“We are going to do more and we actually need more of these private sector refineries for Nigeria to become a net exporter of gasoline and other associated products,” he said.
In 2015, President Muhammadu Buhari had pledged to fix the refineries when elected into office but currently, the combined installed capacity of Nigeria’s existing refineries still stagnates at 445,000 barrels per day.
An estimated $1.2 billion was projected to be raised to upgrade the country’s refineries in 2017 according to former Minister for Petroleum, Ibe Kachikwu who spearheaded the contractual process promising to end reliance on petroleum imports into the country by 2019.
The details of the contract with the oil firms to refurbish the refineries remain sketchy as the NNPC did not publicly disclose their identities.
In a report, Kachikwu said the NNPC mobilised its engineers and local oil servicing firms to carry out the turn around maintenance refineries at $10 million in 2015 but an estimated $50 million was also assigned for maintenance costs at the refineries in 2016.
Maikanti Baru, immediate past GMD of the NNPC according to a news report in January said the country’s refineries had not experienced any Turn Around Maintenance,TAM, for over 42 years.
He also confirmed that major rehabilitation works were being carried out in all the three refineries at the time but the amount involved was not disclosed to the public.
Also in September 2018, the Nigerian Bank of Industry acquired a $500 million loan from China to make available loans to investors interested in modular refineries to boost the increase of petroleum products for local consumption.
However, the loan has not translated into tangible results for the installed refining capacity of petroleum products in the country.
Kyari said these complementary efforts by NNPC and Dangote Group would guarantee energy security for Nigeria as well as crude oil feedstock and other necessary inputs.
He also stated that the national oil company was not in a contest for market share with the Dangote Refinery, but would support the project to give a boost to the country’s refining capacity.