The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said the existing and new refining capacities would be the major drivers of Nigeria’s demand for petroleum products, which is projected to grow massively in the near future.
Kyari, who spoke at the 15th Oil Trading and Logistics (OTL) Africa Downstream Week, in Lagos, said the NNPC 445,000 barrels per day (bpd) refineries, plus Dangote Refinery’s 650,000bpd and the 250,000bsd condensate refineries from private sector partnership, are enough to meet demand for Premium Motor Spirit (PMS) in Nigeria.
Kyari, represented by the Group Executive Director, Downstream, Adeyemi Adetunji, explained that the diversification of NNPC’s portfolio through acquisition of 20 per cent equity, valued at $2.6 billion in the Dangote Refinery located in the Lekki Free Trade Zone, would ensure national energy security and guarantee market for Nigeria’s 300,000 bpd.
He said: “NNPC is adding 215,000 bpd of refining capacity through private sector-driven co-location at the existing facilities in Warri Refining and Petrochemical Company (WRPC) and Port Harcourt Refining Company (PHRC) respectively. Modular refineries are also adding capacities, such as the 5,000 bpd Waltersmith Refinery, which will be upgraded to 50,000 bpd.
“Additional 250,000 bpd is expected to come from the condensate refineries through the private sector partnership. The co-location and condensate refineries will close the PMS supply-demand gap and create positive returns to the investors,” Kyari added.
President of the Dangote Group, Aliko Dangote, has always expressed displeasure that Nigeria, a leading oil producer, still imports to meet its petroleum needs, a development he said prompted him to invest in the refinery.
Meanwhile, Kyari said the Corporation has progressed with the Refineries Rehabilitation Programme to boost its participation in the oil & gas value chain by awarding the $1.5 billion Port Harcourt rehabilitation contract with the commitment to deliver on Warri and Kaduna refineries.
Some $10.4 trillion global stimulus in response to the COVID-19 pandemic has led to the rebound in consumer spending while incentives for long-term investments in hydrocarbons have waned.
On gas commercialisation efforts, Kyari said the Federal Government has declared 2021-2030 as the decade of gas development in Nigeria, saying the demand for natural gas could grow about four times over the next decade, increasing from 4.8 billion cubic feet per day (bcf/d) in 2020 to between 10 and 23bcf/d by 2030.
On the global oil market outlook, he said: “Some $10.4 trillion global stimulus in response to the COVID-19 pandemic has led to the rebound in consumer spending while incentives for long-term investments in hydrocarbons have waned.”
However, he insisted that hydrocarbons would continue to be relevant in the global energy mix for the next two decades, quoting a recent data by the Organisation of the Petroleum Exporting Countries (OPEC).
On the issue of downstream transition, the NNPC helmsman argued that the Nigerian oil and gas industry has been in transition prior to the passage of the Petroleum Industry Bill (PIB), in response to the global energy transition and decarbonisation initiatives.
Noting that it would be difficult to discuss downstream transition in isolation from the overall evolution in the petroleum industry, Kyari added that the NNPC has diversified its portfolio over the years, and transited to an energy company with new investments in gas, power, and renewables.