BY KENNETH EZE
The Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, has said that the NNPC refineries’ 445,000 barrels-per-day, Dangote Refinery’s 650,000 BPD and the 250,000 BSD expected to come from the Condensate refineries through the private sector partnership respectively, would supply the requirement of Premium Motor Spirit needs in Nigeria.
Kyari spoke at the 15th Oil Trading and Logistics Africa Downstream Week in Lagos.
His position corroborated that of the President of the Dangote Group, Aliko Dangote, who expressed dissatisfaction that Nigeria, despite being a leading oil producer, still imported refined petroleum products.
Dangote pointed out that the unsavory situation of the country made him to take up the challenge of constructing one of the biggest refineries in the world.
According to him, some 29,000 Nigerians would be employed in the refinery when completed.
Kyari, represented by the Group Executive Director, Downstream, NNPC, Adeyemi Adetunji, said that the diversification of NNPC’s portfolio through acquisition of 20 per cent equity valued at $2.6 billion in the 650,000 bpd Dangote Refinery would ensure national energy security and guaranteed market for Nigeria’s 300,000 bpd.
“NNPC is adding 215,000 BPD of refining capacity through private sector driven co-location at the existing facilities in Warri Refining and Petrochemical Company and Port Harcourt Refining Company respectively.
“Modular refineries are also adding capacities such as the 5,000 BPD Waltersmith refinery, which will be upgraded to 50,000 BPD.
“Additional 250,000 BPD is expected to come from the Condensate refineries through the private sector partnership. The co-location and Condensate refineries will close the PMS supply-demand gap and create positive returns to the investors,” the NNPC helmsman added.
He added that the Corporation progressed with the Refineries Rehabilitation Programme to boost its participation in the oil and gas value chain by awarding the $1.5 billion Port Harcourt rehabilitation contract with the commitment to deliver on Warri and Kaduna refineries.
On gas commercialisation effort, Kyari said the Federal Government declared 2021 to 2030 as the decade of gas development in Nigeria.
According to Kyari, the demand for natural gas could grow about four times over the next decade, increasing from 4.8 billion cubic feet per day (bcf/d) in 2020 to between 10 and 23 bcf/d in 2030.
He said that currently, supply to the domestic market was about 8bcf/d to power, 0.77 bcf/d to industries, and about 54 bcf/d was flared, while 3.2 bcf/d was for export gas through the LNG and the West Africa Gas Pipeline.
Achieving this growth in demand, he said, would be occasioned by increasing the dispatchable capacity of existing power in line with the Presidential Power Initiative which is less than 1.4 bcf/d).
He added that the growth would be achieved through assuring delivery of major fertiliser projects (Dangote, Brass) 5 bcf/d), and enabling industrial demand for natural gas in the northern axis of the country (1.2 bcf/d).
On the global oil market outlook, Kyari said, “Some $10.4 trillion global stimulus, in response to the COVID-19 pandemic, has led to the rebound in consumers’ spending while incentives for long-term investments in hydro-carbon have waned.
“The OB3 project, which brings gas from East to West, is nearing completion. The 614km Ajaokuta, Kaduna, Kano (AKK) project, which was launched by Mr. President in June 2020, is progressing very well. These could add up to $40 billion to annual GDP and create additional six million jobs.
“The corporation has progressed with the Refineries Rehabilitation Programme to further boost its participation in the Oil and Gas value chain by awarding the $1.5 billion Port Harcourt rehabilitation contract with the commitment to deliver on Warri and Kaduna refineries.
“The rehabilitation of critical downstream infrastructure comprising of major pipelines, depots and terminals through the Build, Operate and Transfer financing model is on course.”
As investments in hydrocarbon continued to wane due to energy transition and geopolitics, Kyari said the world economy faced shortages, high energy prices, rising inflation and sluggish growth.
