Page 5 - DMEA Week 34 2021

DMEA COMMENTARY DMEA

size and magnitude with its very clear security with upstream assets. In April, the Department
implications that is situated in a free trade zone. of Petroleum Resources (DPR) published an
Literally, this refinery is not in this country.” updated list which showed that 23 refinery pro-
Kyari noted the energy security issues the ject licences were active as of March.
country faces being reliant on imports for 100% If they were all to be completed, they would
of refined product demand. “As we speak today, provide an additional refining capacity of
we don’t have any strategic storage or arrange- 1.09mn bpd. Sylva said the “programme is on
ment. So no country will allow any venture of course”.
this nature to exist without having a seat on its “Modular refineries, we have licensed quite a
board.” bit. I am not in a position to give you an exact fig-
He highlighted the finances of the deal which ure now but I know that a few of these refineries
provide NNPC with significant upside. Because are under construction and very soon, we will be
Dangote Refinery is located in the Lekki Free commissioned,” he said.
Trade Zone, “there are several incentives granted He said that the Waltersmith facility is “func-
to this business”. tioning well”, noting that he had “also laid the
He highlighted that the investment would foundation stone for Atlantic refinery and there
be $2.76bn rather than $5bn for the 20% stake, is Niger Delta own that is ongoing”.
which effectively gives NNPC a net refining “The Atlantic is not finished yet, they are very
capacity addition of 130,000 bpd. much on course to finish construction by the
“It is simply impossible to build a refinery of first quarter of next year and there are others that
that capacity with that amount of money. This are ongoing,” he added.
is not just a refinery, but a refinery with a pet- These facilities are the 2,000 bpd and 7,000
rochemical component. So somebody has done bpd units under development by Atlantic Inter-
all the [grunt] work for us, and we are taking a national Refineries and Petrochemical Ltd at
stake in it.” Okpoama in Bayelsa State and by OPAC Refin-
Comments like these are unlikely to endear eries at Umuseti in Delta.
Dangote to the arrangement, with Kyari alluding Sylva added that construction on the OPAC
to this in his comments. unit was now complete and the plant has entered
“Mr Dangote may not be excited with it […] commissioning, while the 5,000 bpd Niger Delta
taking stake was at the [insistence] of the NNPC. Petroleum Resources (Train 3) hydro-skimming
I believe up to this moment, Mr Dangote does unit at Ogbele in Rivers State has progressed to
not want us to take equity in this plant.” the same stage.
However, he concluded on a positive note: Of the 23 refineries listed, only Waltersmith
“This is a very informed policy decision that will has been completed, while the licence for the
guarantee security because we will have a seat – 20,000 bpd Conodit Refinery Nigeria Ltd unit
we will have right to 20% of the production from in Delta State is believed to have expired in July,
this facility.” though Sylva made no mention of this.
Downstream MEA (DMEA) understands
Modular update that the Azikel Hydroskimming Modular Refin-
Meanwhile, with NNPC expecting Port Har- ery in Bayelsa State will come into operation later
court’s first refined products following the this year with a throughput processing capacity
repairs to be delivered by September next year of 12,000 bpd of crude to produce around 1.3mn
and a contract awarded for the overhaul of litres per year of premium motor spirit (gaso-
the smaller Kaduna (110,000 bpd) and Warri line), diesel, kerosene, cooking gas (LPG) and a
(125,000 bpd) facilities, the company has enough small amount of heavy fuel oil.
irons in fires. While NNPC works to rehabilitate and inor-
With that in mind, Minister of State for ganically acquire refining capacity, independent
Petroleum Resources Timipre Sylva this week developers are making steady progress and, all
provided an update on the progress of various going to plan, could bring around 26,000 bpd
modular refineries that while offering only mar- of new capacity on stream within the next few
ginal capacity gains, are designed to integrate months.™

Week 34 26•August•2021 www. NEWSBASE .com P5