The Organisation of Petroleum Exporting Countries (OPEC) has projected the establishment of new modular refineries in Nigeria.
In its World Oil Outlook, launched in Saudi Arabia, OPEC projected that the refineries would complement the Dangote refinery to lift crude oil sales in Africa. The report hyped the 650,000 bpd-capacity Dangote Refinery as one the major contributors to sales in Nigeria when operational.
OPEC said that Nigeria is about to witness the establishment of small modular refineries with 20,000 barrels per day (bpd) capacity in the medium term. The report said that new modular refineries are springing up to complement the Dangote refinery
According to the Outlook, Africa will see a medium-term distillation capacity of 1.2 million bpd.
A significant increase is due to the upcoming Dangote Refinery, which is projected to boost Nigeria’s capacity. The refinery was officially opened in May 2022 by then President Muhammadu Buhari and is slated to begin production this month, with the initial plan of refining diesel and aviation fuel and later petrol in November.
The report said: “Moreover, Nigeria is set to witness several small modular refineries established in the medium term, with capacities of up to 20 thousand barrels per day (tb/d) each”.
Nairametrics reports that despite the optimistic projection of the report, Nigeria faces funding setbacks for modular refineries and rising incidents of pipeline vandalism and crude oil theft. Analysts say the Dangote refinery will cause a significant shift in pricing.
In an interview with Legit.ng, policy energy analyst and Team Lead, Platforms Africa, Adeola Yusuf said that the coming onstream of Dangote Refinery would not make it any better for Nigeria to earn more foreign exchange from crude oil.
“The refinery is privately owned and would seek to maximise profits. Also, it is sited on a Free Trade Zone, meaning Nigerian laws do not bind it and may probably sell refined products to Nigeria in dollars”, Yusuf explained.
But in a response to whether the Dangote Refinery will sell products to Nigeria in foreign currency, the company’s management said it would sell to Nigeria in the local currency.
NNPC Limited becomes the sole importer of petrol as Port Harcourt Refinery is scheduled to begin production in December, but analysts said that more is needed to satiate the consumption needs of Nigerians.
The Group CEO of NNPC Limited, Mallam Mele Kyari said the company has returned to being the sole importer of petrol in Nigeria. Kyari said the current Forex scarcity has impeded marketers’ ability to import refined products despite obtaining the requisite licenses.
There are indications that NNPC Limited will soon cease to be Nigeria’s sole importer of petroleum products. The development comes as oil marketers are said to resume importation of petrol as the Nigerian government moves to end NNPC petrol import dominance.
The move follows a meeting between the Depots and Petroleum Marketers Association of Nigeria, and Major Marketers Association of Nigeria with top officials of the Nigerian Midstream and Downstream Petroleum Products Regulatory Agency this week.
Source: Legit.ng
