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AfrElec GAS-FIRED GENERATION AfrElec

meet its environmental goals by facilitating the GSA, saying: “We welcome Cenpower’s com-
shift from petroleum products to cleaner-burn- mitment to Ghana and recognise Cenpower’s
ing gas. Additionally, it will enable the country to conversion to gas as a significant step in helping
expand the use of its domestic gas reserves. regenerate Ghana’s energy sector.”™B
Finance Minister Ken Ofori-Atta hailed the

FUELS

NNPC extends oil-for-fuels scheme

NIGERIA NIGERIA’S state-owned NNPC will continue its storage depots and pipelines are also restored,
crude oil-for-products swap programme until adding it was offering investors build, operate
2023, its managing director Mele Kyari told a and transfer contracts for the facilities. NNPC
conference on October 6. opened a tender for the pipelines in August and
The country, Africa’s biggest oil producer, intends to announce winning bids in the first
relies heavily on fuel imports, as its main domes- quarter of 2021.
tic refineries are in a state of disrepair and have Nigeria also wants to build up its gas industry
been closed down. This significantly under- to improve energy security. Recently its central
mines its trade balance. bank unveiled a NGN250bn ($648mn) stimulus
Speaking at the African Refiners Association package that it hopes will encourage compressed
conference, Kyari said that an agreement with 15 natural gas (CNG) in vehicles, and liquid petro-
trading companies and refiners on gasoline sup- leum gas (LPG) use in domestic cooking and
plies in exchange for crude oil had been extended power generation.
for six more months until the end of March. The Kyari described gas as the “fuel choice for the
swap deal will continue until Nigeria’s refining future.” Despite having an estimated 5.3 trillion
industry is ready to meet domestic demand in cubic metres in proven gas reserves, the coun-
three years, he said. try’s investments in gas supply beyond its LNG
Kyari said the direct sale, direct purchase export plants has been limited.
(DSDP) agreement had saved some $1bn per “The outlook for Nigeria’s downstream sector
year since its introduction in 2016. Previously looks bright with attractive market conditions,
Nigeria relied on “offshore processing agree- large market, significant crude distillation capac-
ments,” criticised for their lack of transparency ity additions from various refinery projects,
and high cost. Under the DSDP deal, NNPC pro- improvements of the distribution network and
vides crude oil on a free-on-board (FOB) basis the use of natural gas,” Kyari said.™
to fuel suppliers, which in turn deliver petro-
leum products to NNPC at designated ports in
Nigeria.
Private Nigerian conglomerate Dangote is
expected to bring on stream a 650,000 barrel
per day (bpd) refinery in Lekki in 2021-22. But
NNPC also wants to overhaul the country’s four
state-owned plants. It is working with interna-
tional engineering, procurement and construc-
tion (EPC) contractors “to revamp the existing
refineries to operate at world-class capacity uti-
lisation levels,” Kyari said.
The state-owned refineries have a nameplate
capacity of 445,000 bpd, but NNPC revealed last
year they were running at a mere 5.6% of this
output. The low quality of the fuel they produce
has also contributed to pollution problems in
Nigeria’s largest cities. NNPC said it would close
the facilities down completely in April while it
arranges plans to upgrade them.
Kyari said it was important that product

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