Page 11 - DMEA Week 17 2020

DMEA REFINING DMEA
Nigeria incurs further refining losses in Jan
NIGERIA
Nigeria’s aged plants also booked losses in 2019.
NIGERIA’S aged refineries posted a combined loss of NGN9.6bn ($25mn) in January, accord- ing to data disclosed by their operator, Nigerian National Petroleum Corp. (NNPC).
The plants in Kaduna, Port Harcourt and Warri similarly booked losses during most months in 2019. They incurred a total loss for last year of NGN149.2bn, Nigerian daily The Punch reported. Revenues came to NGN69bn, but expenses totalled NGN218.2bn.
The two Port Harcourt refineries accounted for NGN4.4bn of the losses in January, while the Kaduna and Warri plants incurred losses of NGN2.1bn and NGN3.1bn.
Nigeria is scrambling to cut state costs follow- ing the collapse in oil prices, which has resulted in its valuable revenues from oil exports dwin- dling. The country’s refineries are barely opera- ble, producing fuels only on sporadic basis.
NNPC announced in early April it intended to close the plants while it searches for financing
to upgrade them. It wants to modernise them by offering operation and maintenance (O&M) contracts to investors.
NNPC was hoping to raise the plants’ capac- ity to 445,000 barrels per day (bpd) by 2022, in order to end gasoline imports. But the company will struggle to attract partners to invest in their repair and improvement during the current crisis.
NNPC hired Italy’s Maire Tecnimont to over- haul the facilities at Port Harcourt in March last year, with Italian oil firm Eni selected as a tech- nical advisor. However, while Tecnimont has inspected the facilities and drawn up plans for their rehabilitation, it is still waiting on a finalised contract to proceed with engineering and con- struction work.
In another move to rein in spending, NNPC has also said it will end subsidies for fuel, which have drained billions of dollars from public cof- fers over the years. ™
KNPC halts work at refinery after COVID-19 case
KUWAIT
Kuwait is expanding both of its refineries.
THE Kuwait National Petroleum (KNPC) has halted work at the Al-Ahmadi oil refinery, it said on April 24, after a worker was diagnosed with coronavirus (COVID-19).
The worker was an Indian national employed by a contractor, KNPC said on social media.
“Work has stopped on the project until pre- cautionary measures are taken to identify those who came in contract with him and the neces- sarytestsaredone,”KNPCsaid.
Kuwait has so far registered 4,024 coronavi- rus cases and 26 deaths.
KNPC did not say which project it was refer- ring to. However, the company in early April completed a new biofuels expansion at the site.
The refinery has been fitted with two extra pro- duction units – one for coal and one for naphtha hydrotreating – that will produce 37,000 and 8,400 barrels of oil equivalent per day (boepd) respec- tively. Work is underway on a similar project at the Abdullah refinery, according to KNPC.
Both refineries are undergoing
modernisation. Once work is finished at Al-Ah- madi, the refinery will boast a production capac- ity of 364,000 barrels per day (bpd). The cost of the biofuels project is KWD4.6bn ($14.7bn).
Fuel demand
KNPC reported on April 16 that demand for jet fuel and gasoline has plummeted by 70% and 55% respectively over the previous two months asaresultofCOVID-19lockdownmeasures.
The government suspended all commercial flights in and out of Kuwait International Airport on March 13. Jet demand averaged 11,500 bpd in March and April last year, according to data from the Joint Organisations Data Initiative (JODI).
Authorities also began restricting movement on March 1, causing gasoline demand to drop to 5.9mn litres per day. Demand for diesel has fallen by 5% in the past eight weeks, according to KNPC. In comparison, diesel consumption averaged 40,000 bpd in March and April last year,JODIstates.™
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