Page 5 - AfrOil Week 16 2022

AfrOil COMMENTARY AfrOil

The Italian company, with its compatriot super- Devakumar Edwin, the Dangote Group’s
major Eni as technical advisor, had carried out a executive for strategy, capital projects and port-
$50mn, six-month “integrity check,” including folio development, said in late March that “75%
equipment inspection and “relevant engineering hydraulic testing ... as well as 70% of electrical
and planning activities,” in 2019. cable fitting have been completed preparatory
Sylva assessed the progress in his statement: to the completion of the refinery in the fourth
“This project kicked off second quarter last year quarter of this year.”
and where they are now is quite impressive. It The company’s CEO Aliko Dangote said in
is on schedule. The commitment is to deliver February that the unit would come on stream in
60,000 barrels per day from this refinery by the September at an initial capacity of 540,000 bpd,
first quarter of next year, and, of course, we are ramping up to full capacity in early 2023.
quite happy.”
In October 2021, NNPC executive director Modular units
for refineries and petrochemicals Mustapha While the Dangote unit will be capable of cov-
Yakubu said: “Everything has been put in place ering all of Nigeria’s domestic fuel demand and
to ensure that the project is delivered hitch-free turn the country into a net exporter, there will
and on schedule,” noting that the facility will still be a place for smaller, modular refining
return to at least 90% capacity when it resumes facilities, which have been the one tangible ray
operation. of light over past few years. The Dangote
At present, the country’s refining slate is lim- refinery will come
Other assets ited to the 10,000 bpd OPAC Refineries facility
Once work at PHRC is complete, rehabilitation in Delta state, the 6,000 bpd Edo Refinery and on stream in
work will begin on NNPC’s facilities at Warri Petrochemical Co., the 5,000 bpd Waltersmith
and Kaduna, which have capacities of 125,000 Refining & Petrochemical Co. at Ibigwe in Imo September at an
bpd and 110,000 bpd respectively. and a 1,000 bpd unit run by Niger Delta Petro-
In August 2021 contracts were awarded to leum Resources in Rivers. initial capacity of
Italy’s Saipem and subsidiary Saipem Contract- An announcement is imminent on the start 540,000 bpd
ing worth a total of $1.485bn ($898mn for Warri of operations at the 2,500 bpd Duport Mid-
and $587mn for Kaduna). These entail a three- stream facility in Edo State’s Egbokor Energy
phase approach to rehabilitating the refineries Park, while the 12,000 bpd Azikel Petroleum
over 77 months. and 2,000 bpd Atlantic International Refineries
and Petrochemical facilities in Bayelsa are also
Dangote expected to come on stream this year.
While progress at on Nigeria’s state-owned refin- Integration with remote oilfields and their
ing slate is encouraging for the sector, finalisa- ability to provide fuel to the surrounding areas
tion of the long-awaited 650,000-bpd Dangote has helped with buy-in from local communities,
Refinery will provide a far bigger boost. which has been key to their success.
As the country’s first major privately devel- Given their success, there have been calls
oped refinery, it is seen playing a major part in from industry stakeholders for Abuja to provide
the diversification of the Nigerian economy, and a subsidy of up to 70% for the fee to obtain a
Abuja has high hopes pinned on its success. refining licence as a means of reducing the num-
Speaking during a tour of the facility at Lekki ber of illegal refineries – sometimes referred to
outside Lagos, Minister of Minister of Infor- as artisanal refineries. However, according to
mation and Culture Lai Mohammed said the data provided by oil and gas consultancy IGM
$19bn refinery – and the nearby Dangote Ferti- Energy, as of December last year, 14 entities
lizer facility that was launched in March – would held licences covering 373,000 bpd of refining
be a game-changer not just for Nigeria, but for capacity, none of which had proceeded to the
Africa more broadly. “After visiting the facilities, final ‘licence to establish’ phase.
one can conveniently say that Dangote is leading While further expansion of the sector may be
Nigeria’s industrial revolution,” he said. possible, considering that by the end of this year,
Construction work at the refinery is com- Nigeria’s refining capacity could rise from the
plete and testing is ongoing ahead of the com- current 22,000 bpd to 579,000 bpd, increasing
mencement of refining operations during the to 749,000 bpd just a few months later, there is
third quarter. little urgency to hand out more licences. ™

Delivery of component to Dangote Refinery in 2019 (Photo: Mammoet)

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