Page 5 - AfrOil Week 22 2022

AfrOil COMMENTARY AfrOil

Accounting for more than 45% of the total, the plants over 77 months.
Dangote plant will clearly be key to the success The next largest project on the list is the BUA
of these plans. Following a meeting with Presi- Refinery & Petrochemicals Ltd plant under
dent Muhammadu Buhari in April, Aliko Dan- development in Akwa Ibom by the local BUA
gote, the head of the Dangote Group, said that Group. Having completed the conceptual feasi-
the $19bn plant should be completed by the end bility study for the project in 2018, US contrac-
of the current administration. “By the grace of tor KBR was awarded a front-end engineering
God, Mr President will come and commission and design (FEED) deal last year and work is
it [the refinery] before the end of his term next understood to be ongoing.
year,” he commented.
Meanwhile, Devakumar Edwin, Dangote Midstream optimism
Group’s top executive for strategy, capital pro- Meanwhile, other officials have pointed to the
jects and portfolio development, said in late opportunities for Nigeria in the midstream and
March that “75% [of] hydraulic testing ... as from the development and harnessing of its
well as 70% of electrical cable fitting have been large gas reserves.
completed preparatory to the completion of Speaking at a forum last week, Sylva said that
the refinery in the fourth quarter of this year.” Nigeria has “adopted gas as its transition fuel
NNPC Ltd owns a 20% stake in the project, and towards actualising its net-zero carbon emis-
managing director Mele Kyari said last week that sion and was supporting critical projects to that
he expected it to start up in the first quarter of effect.” He highlighted the Nigeria LNG (NLNG)
2023. Train 7 project, the Ajaokuta-Kaduna-Kano gas
But in a recent ratings announcement, Fitch (AKK) pipeline, the ambitious Nigeria-Morocco
said that it anticipates that the refinery will Gas Pipeline (NMGP) and Trans Saharan Gas
start production in the second half of 2023, Pipeline (TSGP) projects and the National Gas
and “conservatively assumes a six-month delay Transportation Network Code.
in production ramp-up versus management Expressing optimism about broadening
expectations with an average gross refining mar- knowledge of the “Nigerian content opportuni-
gin of $10 per barrel”. ties associated with the midstream and down-
Meanwhile, progress on rehabilitating the stream sectors,” Sylva said: “We must find ways
state refineries appears to be moving in a similar to unlock the natural gas and domestic produc- Nigeria’s current
direction. In April, Nigerian Minister of State for tion potential of Nigeria and drag millions of our
Petroleum Resources Timipre Sylva said that the people out of energy poverty.” active refining
first phase of ongoing repair work at the 210,000 Meanwhile, Wabote noted that NCDMB
bpd Port Harcourt Refining Complex (PHRC) is collaborating with NNPC Ltd to develop a slate is limited
should be completed in early 2023, offering a 50,000-litre petroleum products terminal in
figure of 60,000 bpd by April. Brass Island and a 48,000-litre per day base oil to several small
PHRC comprises a 60,000 bpd unit built in production facility at Port Harcourt, while con- modular plants
1965, known as Area 5, and a newer unit built in struction remains ongoing at the 64,000 lpd
1989 capable of processing 150,000 bpd of crude. Eraskon Lube Oil plant in Bayelsa.
It has been offline since 2019 amid reports that
no comprehensive turnaround maintenance Modular movement
(TAM) had been carried out for as long as 40 The country’s current refining slate is limited
years. to the Waltersmith Refining & Petrochemical
Having secured a $1bn loan from Cai- Co. (5,000 bpd, Imo State), OPAC Refineries
ro-based African Export-Import Bank (Afrex- (10,000 bpd, Delta) and Niger Delta Petroleum
imbank) in February 2021, the Nigerian Resources Train 3 (1,000 bpd, Rivers). Expan-
government awarded a $1.5bn contract to Italy’s sion plans would increase the combined capac-
Maire Tecnimont two months later covering the ity of these facilities to 61,000 bpd.
engineering, procurement and construction Meanwhile, four other facilities – Edo Refin-
(EPC) work to revive the refinery. ery and Petrochemical Co. (6,000 bpd, Edo),
The original plan was to reach 90% of its Duport Midstream (2,500 bpd, Edo), Azikel
nameplate capacity by 2023, with the second and Petroleum Ltd (12,000 bpd) and Atlantic Inter-
third phases six and 26 months later respectively. national Refineries and Petrochemical (2,000
The Italian company, with compatriot superma- bpd, both Bayelsa) are in advanced stages of
jor Eni as technical advisor, had carried out a preparation for launch and would take the total
$50mn, six-month “integrity check,” including modular capacity to 121,000 bpd.
equipment inspection and “relevant engineering This rounds out the full 1.4mn bpd capacity
and planning activities” in 2019. laid out by the MPR but leaves little room for at
Once work at PHRC is complete, rehabil- least 14 other refineries for which licences were
itation work will begin on NNPC Ltd’s Warri previously apportioned by the Department of
and Kaduna refineries, which have capacities of Petroleum Resources (DPR). That department
125,000 bpd and 110,000 bpd respectively. was dissolved last year in line with the provi-
In August 2021 contracts were awarded sions of the Petroleum Industry Act (PIA) and
to Italy’s Saipem and subsidiary Saipem Con- replaced with the Nigerian Midstream and
tracting worth a total of $1.485bn – $898mn Downstream Petroleum Regulatory Authority
for Warri and $587mn for Kaduna – that entail (NMDPRA) and the Nigerian Upstream Petro-
a three-phase approach to rehabilitating the leum Regulatory Commission (NUPRC). ™

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