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This dependence significantly undermines its adding it was offering investors build, operate
trade balance. and transfer contracts for the facilities. NNPC
Speaking at the African Refiners Association opened a tender for the pipelines in August and
conference, Kyari said that an agreement with intends to announce winning bids in the first
15 trading companies and refiners on gasoline quarter of 2021.
supplies in exchange for crude oil had been Nigeria also wants to build up its gas industry
extended for six more months until the end of to improve energy security. Recently its central
March. The swap deal will continue until Nige- bank unveiled a NGN250bn ($648mn) stimulus
ria’s refining industry is ready to meet domestic package that it hopes will encourage compressed
demand in three years, he said. natural gas (CNG) in vehicles, and liquid petro-
Kyari said the direct sale, direct purchase leum gas (LPG) use in domestic cooking and
(DSDP) agreement had saved some $1bn per power generation.
year since its introduction in 2016. Previously Kyari described gas as the “fuel choice for the
Nigeria relied on “offshore processing agree- future.” Despite having an estimated 5.3 trillion
ments,” criticised for their lack of transparency cubic metres in proven gas reserves, the coun-
and high cost. Under the DSDP deal, NNPC try’s investments in gas supply beyond its LNG
provides crude oil on a free-on-board (FOB) export plants has been limited.
basis to fuel suppliers, which in turn deliver “The outlook for Nigeria’s downstream sec-
petroleum products to NNPC at designated tor looks bright with attractive market condi-
ports in Nigeria. tions, large market, significant crude distillation
Private Nigerian conglomerate Dangote is capacity additions from various refinery pro-
expected to bring on stream a 650,000 barrel jects, improvements of the distribution network
per day (bpd) refinery in Lekki in 2021-22. But and the use of natural gas,” Kyari said. ™
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
storage depots and pipelines are also restored, NNPC offers crude oil in exchange for refined fuels (Photo: File)

Report: Fossil fuel producers not

prepared to meet Paris targets

REGIONAL NONE of the world’s fossil fuel producers will majors this year, so it is striking this independent
be able to limit climate warming to 2°C by 2050, research still shows those commitments do not
according to new research published this week. yet align with limiting climate change to 2°C,”
Research from the Transition Pathway Initi- said Adam Matthews, co-chair of the Transition
ative, which is backed by the London School of Pathway Initiative.
Economics and a number of investors, warned On the other hand, the report found that
that oil, gas and coal companies are not putting many companies in the electric utility sector
in place policies that will limit temperature were judged to be aligned, with 39 meeting Paris
growth and contribute to combating climate Pledges and 22 meeting the more ambitious
change. ‘below 2°C’ benchmark.
The report examined 125 oil and gas produc- The report’s author, Professor Simon Dietz,
ers, coal miners and electricity groups on their said this difference comes from more regulation
preparedness for a lower-carbon economy. on the electricity sector and that the core busi-
“Investors have witnessed a flurry of sig- ness model is not under threat, as technology for
nificant climate announcements by fossil fuel decarbonising electricity already exists.

P14 www. NEWSBASE .com Week 41 14•October•2020