Dangote Refinery, NNPC, other refineries to boost consumer demand for petroleum products: Kyari

*Mele Kyari, Group Managing Director and CEO of NNPC Limited, says a combination of Dangote Petroleum Refinery, the Corporation’s refineries, and other modular refineries are expected to be the major drivers of fuel supply and consumer demand for petroleum products in Nigeria in the near future

*Dangote Refinery will employ about 29,000 Nigerians on completion, and this will help in the employment generation drive of the Federal Government  ─Alhaji Aliko Dangote, President, Dangote Group

Gbenga Kayode | ConsumerConnect

Designed to boost the Premium Motor Spirit (PMS) needs of Nigerian consumers, stakeholder in the downstream sector of the economy have stated the 650,000 barrels-per-day (bpd) Dangote Petroleum Refinery, Nigerian National Petroleum Company (NNPC) Limited, and other modular refineries are expected to be the major drivers of Nigeria’s demand for petroleum products

It was gathered the stakeholders at a recent industry forum noted with modular refineries in place consumer demand for products is projected to grow massively in the nearest future.

RELATED: Why NNPC Is Acquiring 20 Percent Equity In Dangote Refinery ─GMD

Malam Mele Kyari, Group Managing Director and Chief Executive Officer (GMD/CEO) of NNPC Limited, also lent credence to this development while speaking at the 15th Oil Trading and Logistics (OTL) Africa Downstream Week, in Lagos.

Alhaji Aliko Dangote, President of Dangote Group (Inset)

The NNPC GMD/CEO said NNPC Refineries’ 445,000bpd, Dangote Refinery’s 650,000 bpd, and the 250,000 bpd expected to come from the Condensate Refineries through the private sector partnership respectively would supply the requirement of the PMS needs of consumers in the country.

RELATED: Rehabilitation Of Port Harcourt Refinery Begins, Project To Generate 3,000 Jobs ─NNPC

Represented on the occasion by Adeyemi Adetunji, Group Executive Director, Downstream at NNPC, Malam Kyari also explained that the diversification of NNPC’s portfolio through acquisition of 20 percent equity valued at $2.6billion in Dangote Refinery would ensure national energy security and guarantee market for Nigeria’s 300,000 bpd.

Kyari’s submission confirmed that of Alhaji Aliko Dangote, President of Dangote Group, who reportedly noted that he was dissatisfied with the fact that Nigeria is a leading oil producer, but imports all its petroleum needs.

Alhaji Dangote, who also spoke on the ongoing Dangote Petroleum Refinery project, in Lagos, said it was the unsavoury situation the country found itself that made him to take up the challenge to embark on the construction of the gigantic refinery project in Lagos.

ConsumerConnect reports the Dangote Petroleum Refinery, which is currently under construction the Lekki Free Trade Zone, in Lagos State, has been described as one of the biggest projects in the world.

RELATED: Dangote Oil Refinery Will Cost About $19billion On Project Completion ─GED

The President of Dangote Group disclosed the refinery project, on completion, would employ some 29,000 Nigerians, and this would also help in the employment generation drive of the Federal Government.

According to Kyari, “NNPC is adding 215,000bpd of refining capacity through private sector-driven colocation at the existing facilities in Warri Refining and Petrochemical Company (WRPC) and Port Harcourt Refining Company (PHRC) respectively.

“Modular refineries are also adding capacities such as the 5,000bpd Waltersmith refinery, which will be upgraded to 50,000bpd.

“Additional 250,000bpd 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 company, he stated, has progressed with the Refineries Rehabilitation Programme to boost its participation in the oil & gas value chain by awarding the $1.5billion Port Harcourt rehabilitation contract with the commitment to delivering on Warri and Kaduna Refineries.

The NNPC GMD/CEO further said as regards gas commercialisation effort, the Federal Government has declared 2021-2030 as the Decade of Gas Development in Nigeria.

READ ALSO: Government’s Approval Of NNPC’s Investment In Dangote Refinery Commendable ─Experts

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 – 23 bcf/d in 2030, stated he.

Kyari noted 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 (WAGP).

According to him, achieving this growth in demand 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).

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), he said.

Whereas on the global oil market outlook, the NNPC Chief 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.”

He also stated that hydrocarbon would continue to be relevant in the global energy mix for the next two decades, quoting the recent data by the Organisation of Petroleum Exporting Countries (OPEC).

In respect of the downstream in transition, the NNPC GMD/CEO as well said that the Nigerian oil and gas industry had been in transition prior to introduction of the Petroleum Industry Bill (PIB) as a response to the global energy transition and decarbonisation initiatives in the country.

He also clarified it would be difficult to discuss the transition in the downstream sub-sector of the economy in isolation from the overall evolution that was happening in the industry.

According to him, NNPC has diversified its portfolio over the years, transitioning to an energy company with new investments in gas, power, and renewables, pointing out that key pipeline projects are ongoing to assure delivery of gas to the demand nodes.

Kyari said: “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 (BOT) financing model is on course.”

The transition in Nigeria’s oil and gas sector was being driven by the global decarbonisation efforts at switching to renewables in response to environmental concerns.

As investments in hydrocarbon continued to wane due to energy transition and geopolitics, he observed that the world economy faced shortages, high energy prices, rising inflation and sluggish growth.

Kindly Share This Story