Page 5 - DMEA Week 26 2022

DMEA COMMENTARY DMEA

Nigerian Refineries - Current and Planned Capacity (kbbl/d)
Refinery State Status / Licence Expiry Active End-22 Planned / Theoretical
Port Harcourt Refinery 1 - NNPC Rivers Under Rehabilitation 0 0 60
Port Harcourt Refinery 2 - NNPC Rivers Under Rehabilitation 0 0 150
Warri Refining and Petrochemical Co. - NNPC Delta Under Rehabilitation 0 0 125
Kaduna Refining and Petrochemical Co. - NNPC Kaduna Under Rehabilitation 0 0 110
Waltersmith Refining & Petrochemical Company Imo Operational 5 5 45
OPAC Refineries Delta Complete 10 10 10
Niger Delta Petroleum Resources (Train 3) Rivers Complete 1 1 6
Edo Refinery and Petrochemical Company Edo Complete 0 6 36
Duport Midstream Edo Complete 0 2.5 10
Dangote Lagos Complete, Testing Ongoing 0 540 650
Azikel Petroleum Ltd Bayelsa >85% Complete 0 12 12
Atlantic International Refineries and Petrochemical Bayelsa Construction Ongoing 0 2 2
BUA Refinery & Petrochemicals Limited Akwa Ibom Construction Ongoing 0 0 200
Lowrie Refinery Ltd Delta Sep-22 0 0 5
Excel Refinery Ltd Bayelsa Sep-22 0 0 5
Clairgold Oil & Gas Engineering Ltd Delta Dec-21 0 0 20
Ogini Refinery Ltd Delta Dec-21 0 0 5
Etopo Energy Plc Delta Jan-22 0 0 30
Gasoline Associates International Ltd Ogun Feb-22 0 0 100
NPDC/ND WESTERN OML 34 JV Delta Feb-22 0 0 10
Frao Oil Nigeria Ltd Delta Mar-22 0 0 12
Kingdom Global Trading Petroleum & Gas Delta Mar-22 0 0 12
Resource Petroleum & Petrochemicals International Akwa Ibom Mar-22 0 0 100
Gazingstock Petroleum Company Ltd Delta Mar-22 0 0 5
Amakpe International Refineries Ltd Akwa Ibom Jun-22 0 0 12
Allegiance Energy and Power Ltd Ibom State Oct-22 0 0 55
Alexis Refinery Ltd Delta Dec-22 0 0 2
Total 16 579 1,789
Source: IGM Energy

Ahead of this, NNPC has paid the first instal- NNPC official as saying that payment of the
ment to acquire its 20% stake in the facility under balance is subject to the facility’s start-up of the
an agreement signed in August. This valued the plant and is linked to crude supplies to Dangote.
project at around $14bn, below the $15-16bn “We have made the payments. We paid $1bn,
valuation previously touted. Term sheets were the balance is subject to plant start-up and tied
signed by NNPC and Dangote Group, with talks to crude supply. It was a very ingenious deal. It
understood to be ongoing regarding the financ- locks market for our crude and puts no stress on
ing of the acquisition. payment, as we will pay only $2 on every barrel
Much of the funding was sourced from a supplied,” he added.
loan signed in November with the Cairo-based Meanwhile, having received NNPC’s invest-
African Export-Import Bank (Afreximbank) ment – and a prior $650mn facility from Afrex-
– which is also supporting the renovation and imbank in 2018 – the refinery’s parent Dangote
upgrade of Port Harcourt. Industries Ltd this week offered bonds worth
For NNPC, the deal is an important part of $72mn. The seven-year unsecured bond is
its new strategy for the downstream sector, fol- offered with a pricing range of 12.25-12.75%,
lowing decades of poor performance. However, with Dangote rated AA+ by GCR and AA (ncr)
the company admits that Dangote Group’s pres- by Fitch. The proceeds will be used in the finali-
ident and CEO Aliko Dangote was not keen on sation of the refinery project.
NNPC’s involvement. The project will be the culmination not just
Speaking to This Day in mid-July, Kyari of years of development, but for Nigeria, well
said of the investment: “[CEO Aliko Dangote] over a decade of effort to encourage investors to
didn’t ask for it. It’s our decision to take equity. develop refining capacity. Given its size, current
We made this decision three years ago much market fundamentals and the frailty of Nigeria’s
earlier. It’s not what he wants, but they are also existing downstream infrastructure, it is unsur-
aware that they operate in a resource-dependent prising that NNPC wants in – particularly as
country. We made a request and it’s the policy of catering to domestic fuel demand and allowing
government that we take interest in this refinery.” for exports of products is likely to cover up some
Now that the first instalment has been paid, of the cracks elsewhere and take some pressure
local media outlet The Whistler quoted an off progress at state units.™

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