Page 5 - AfrOil Week 35 2021

AfrOil COMMENTARY AfrOil

Two facilities have been issued with an LTO: they are going to make from the business.”
the 5,000 bpd modular unit developed by Wal- He added: “It’s not a cash transaction where
tersmith Petroman at Ibigwe and Niger Delta they are paying all cash. You can see that if we
Petroleum Resources’ (NDPR) expanded 6,000 don’t have confidence in what we are doing, we
bpd topping plant in Ogbele. would have asked them to pay all cash.”
The Waltersmith facility came into operation Dangote also noted that the deal would see
in November 2020, while the construction has NNPC also take a stake in the petrochemicals
been completed on the NDPR unit and it has project.
been referred for oversight by Downstream
Monitoring and Regulation (DMR). Petchem progress
The Azikel Hydroskimming Modular Refin- Meanwhile, the refinery’s parent firm Dangote
ery is expected to come into operation later this Industries has provided an update on the devel-
year in Bayelsa State with a throughput process- opment of the petrochemical facility the com-
ing capacity of 12,000 bpd. pany is building to sit alongside the world-scale
The DPR document showed that permits refinery.
for the 100,000 bpd Niger Delta Petroleum In a statement to press, Devakumar Edwin,
Resources and Petrochemical Ltd at Escravos, Dangote’s executive director of strategy, capital
the 100,000 bpd Jil-Amber Consortium con- projects and portfolio development said that the
version plant at the Port Harcourt Refining $2bn petrochemical facility’s slate will comprise
complex in Rivers State and the 10,000 bpd RG 77 different grades of polypropylene, with the
Shinjin Petrochemicals Ltd unit in Koko, Delta unit becoming the largest of its kind in Africa.
State are all inactive. Mechanical completion of the refinery is
Meanwhile, the ATC for the 20,000 bpd anticipated late this year, with operations pegged
Conodit Refinery Nigeria Ltd unit in Delta State to begin in January 2022, though Edwin said
expired in July, with the ATC for the 10,000 bpd only that the petrochemical unit was nearing
Duport Midstream facility in Edo State expiring completion. Mechanical
this month. The unit will have a capacity of 900,000
At the time of publication, DPR had not tonnes per year (tpy) and is expected to generate completion of the
responded to a request by NewsBase to obtain an annual turnover of $1.2bn.
the latest list in full. Of the total proposed capac- He was quoted by News Agency of Nigeria Dangote refinery
ity of 3.51mn bpd, projects with a combined (NAN) as saying: “It has been strategically posi- is anticipated
total of 1.49mn bpd hold active permits, with the tioned to cater for the demands of the growing
Dangote Refinery accounting for almost 44% of plastic processing downstream industries; not late this year,
that figure. only in Africa, but also in other parts of the
When asked about the likelihood of these world.” with operations
projects coming to fruition, Ian Simm, Principal “Right now, raw materials from polypropyl-
Advisor at UK-based consultancy IGM Energy, ene are imported into the country. There is no pegged to begin
told NewsBase: “By setting a two-year deadline foreign exchange for manufacturers to import in January 2022
to make tangible progress, DPR has created a raw materials. The Dangote Petrochemical plant
transparent system that allows ambitious com- is going to take care of this challenge – when the
panies the opportunity to set up refineries while raw materials are locally available, there will be
relatively quickly excluding those that fail to many more people who will be willing to invest
make the grade.” in the economy,” he added.
“It does, however, allow for the announce- He added that the country would benefit
ment of a disproportionate number of refining from the foreign exchange savings from reduc-
projects that have little chance of ever being real- ing petrochemical imports with the downstream
ised. You would get pretty long odds on more sector to receive a significant boost from “the
than half of these units being completed,” he availability of petrochemicals in the country”.
added. In June, Dangote began commercial produc-
tion of urea at facilities located near the inte-
Refinery deal grated refinery and petrochemicals complex.
Also this week, Aliko Dangote said that the The urea plant, which will have a capacity of
National Nigerian Petroleum Corp. (NNPC) 3mn tpy in its first phase, is claimed by Dangote
would pay only around a third of its acquisition to be the largest project in the global fertiliser
of a 20% stake in the Dangote Refinery in cash. sector.
Speaking to the Arise News channel, he said The Dangote Fertiliser complex consists of
that the remainder would be split between crude two 2,200-tonne per day ammonia plants using
sales and profits. Halder Topsoe technology, two 4,000 tpd melt
Noting that he wanted to clarify misconcep- urea plants using Snamprogetti technology and
tions about the refinery deal, he said: “When two 4,000 tpd urea granulation plants using
they talk about the $2.7bn, you know, [NNPC] Uhde Technology.
are paying one third of the money. Another one While there remains significant doubt about
third of the money, again, will actually be paid the addition of millions of barrels of refining
through supply of crude, with the deduction of capacity, projects that have advanced to the
[a] maximum of about $2 and some cents. And construction phase will transform the country’s
then the [final] one third of it, which is another downstream sector, creating jobs, aiding man-
$850mn to $900mn, will be paid from the profit ufacturing and reducing Abuja’s import bill. ™

Week 35 01•September•2021 www. NEWSBASE .com P5