Page 10 - DMEA Week 14 2020

DMEA REFINING DMEA
Nigeria to close loss- making refineries
NIGERIA
The three decades-old refineries only operate sporadically due to their outdated equipment.
NIGERIA has opted to shut down its loss-mak- ing oil refineries while it searches for financing to upgrade them, Nigeria National Petroleum Co. (NNPC) head Mele Kyari said in a television interview on April 8.
Once their modernisation is complete, the national oil company (NOC) also intends to transfer operational control of the facility to pri- vate hands, he said.
The three decades-old refineries have only operated sporadically in recent years, as much of their equipment is outdated and in some cases inoperable. Nigeria has struggled for years to secure the financing necessary to upgrade them, so far without success.
“Today, after proper scoping, which was not done in the past, we know exactly what to do to get them back on stream,” Kyari explained.
Nigeria, Africa’s biggest oil exporter, is look- ing to cut $5bn from its budget from the oil price collapse over the past month. The coun- try relies heavily on revenues from NNPC, which has slashed its prices to maintain its market share as Saudi Arabia has sought to flood the market.
NNPC will need to cut operational and cap- ital spending to free up cash for the national budget. Its downstream operations have been a
considerable drain on its finances in recent years. Kyari said the company had secured financ- ing for the modernisation programme, without divulging details. The company has claimed this several times in the past, only for the announced
deals to fall through.
NNPC is now pursuing “a different model”
for the refineries, Kyari said, including the type used by Nigeria LNG, which is operated by an international consortium. He said the company would no longer operate the plants after they had been upgraded.
“We are going to get an O&M [operations and maintenance] contract. NNPC won’t run it,” he said. “We are going to get a firm that will guaran- tee that this plant would run for some time.”™
Kuwait completes upgrades at major refinery
KUWAIT
Kuwait is aiming for a big increase in refining capacity.
KUWAIT’S Mina Al-Ahmadi oil refinery has wrapped up a biofuels expansion project, state-run media reported on April 7 citing the plant’s operator, Kuwait National Petroleum Co (KNPC).
The refinery has been fitted with two extra production units – one for coal and one for naphtha hydrotreating – that will produce 37,000 and 8,400 barrels of oil equivalent per day (boepd) respectively. Work is underway on a similar project at the Mina Abdullah refinery, according to KNPC.
The two refineries are undergoing moderni- sation as part of Kuwait’s Clean Fuels initiative, aimed at producing higher-value products such as diesel and kerosene that can be exported.
Once the work is finished, the Mina
Al-Ahmadi refinery will boast a production capacity of 364,000 barrels per day (bpd), a KNPC official has said. The cost of the biofuels project is KWD4.6bn ($14.7bn).
After the new units are commissioned at Mina Abdullah, the biofuels project will have a capacity of 800,000 bpd.
Kuwait currently has a refining capacity of around 730,000 bpd, the bulk of which is at Mina Al-Ahmadi and Mina Abdullah, its largest plants.
Longer term, KNPC aims to boost its refining capacity to 1.6mn bpd by 2025, it said last year. The Clean Fuels initiative began in April 2014 and was originally due to be completed in April 2018, but struggled with delays.
Kuwait also plans to bring a new refinery, al-Zour, on stream later this year. ™
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Week 14 09•April•2020