Page 5 - DMEA Week 04 2022
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DMEA COMMENTARY DMEA
products to cover all of Nigeria’s domestic being added in 2022, namely those being built
demand. by Duport Midstream in Edo State (2,500 bpd in
The country is currently a net importer of March), ans Azikel Petroleum Ltd (12,000 bpd)
fuel, despite its position as Africa’s largest crude and Atlantic International Refineries and Petro-
oil producer. chemical (2,000 bpd), both in Bayelsa State.
While they will be eclipsed by the 540,000
Refining uptick bpd throughput of Dangote – and 650,000 bpd
NNPC took its Port Harcourt, Kaduna and soon after – these will take Nigeria’s modular
Warri refineries out of service in 2019 for long refining capacity beyond 38,000 bpd, providing
overdue repairs, having failed to carry out turn- a much-needed ‘win’ for domestic enterprise and
around maintenance (TAM) work in as much as delivering a proven business model for future
four decades. remote field development.
The country’s state refining capacity fell to
zero as a result. Wait almost over
That maintenance work kicked off belatedly The Nigerian government has great hopes for
in mid-2021, following major awards to Ita- the impact the Dangote refinery will have when
ly’s Maire Tecnimont, Saipem and subsidiary it comes into operation and the facility is seen
Saipem Contracting, and is unlikely to bear fruit as the silver bullet to costly fuel subsidies and
until next year. imports of refined products.
However, according to a research note by At present, Nigeria is spending around NGN3
consultancy IGM Energy, “the Nigerian down- trillion ($7.23bn) per year on subsidies, while
stream sector has received a meaningful boost refined product imports account for around 30%
over the past 14 months from the successful of foreign exchange spending.
implementation of several modular refinery With Dangote buying up to 70% of its feed-
projects integrated with oilfield developments”. stock in naira, the Central Bank of Nigeria
These facilities have a current capacity of (CBN) anticipates that the government will no
22,000 bpd, it said, and account for Nigeria’s full longer need to import fuel, with another 10% of
active refining slate. forex spending to be saved by the launch of the
When it launches though, the Dangote facil- integrated Dangote Petrochemical unit, which
ity will “steal the limelight”, turning Nigeria from includes a 3mn tonne per year (tpy) fertiliser unit
an importer of refined products to an export to produce ammonia and urea for use in agricul-
overnight. The success of modular refining is ture, as well as polypropylene and polyethylene.
likely to continue providing vital fuel supplies Such figures paint a bright future for fuel and
to remote areas and easing reliance on infra- fertiliser availability in Nigeria, and may provide
structure that is susceptible to vandalism. IGM enough building blocks to finally remove subsi-
Energy sees a further three modular refineries dies and ease the strain on government coffers.
Week 04 27•January•2022 www. NEWSBASE .com P5
