Nigeria’s modular refining sector is expected to expand next year, with seven new refineries projected to commence operations with a combined capacity of 83,000 barrels per day, according to Argus Media’s George Maher-Bonnett.
Maher-Bonnett disclosed this in Lagos on Wednesday during a presentation at the OTL Africa Downstream conference, where he highlighted the changing dynamics of Nigeria’s petroleum products market amid rising local refining capacity and declining fuel demand.
In his presentation, titled ‘African Energy Outlook’, Maher-Bonnett said four modular refineries operated in Nigeria in September, with a combined capacity of 32,000 barrels per day.
“Four modular refineries operating in September, total 32,000 b/d capacity,” he said.
He added, “Seven new modular refineries to start next year“ with a total of 83,000 barrels per capacity.
The projected additions would represent more than two and a half times the combined capacity of the four modular refineries operating in September, potentially increasing the contribution of smaller refining facilities to Nigeria’s domestic petroleum products supply.
However, the presentation did not identify the seven proposed refineries, their owners or locations, or provide individual capacity figures and commissioning schedules.
Maher-Bonnett also highlighted the growing role of the Dangote Petroleum Refinery in improving Nigeria’s self-sufficiency in petroleum products, despite a decline in fuel demand during the year.
“Nigerian fuels demand is down this year,” the presentation stated, attributing the development to “higher flat prices.”
He added self-sufficiency is improving with Dangote ramp-up, projecting that modular refineries would play a growing role.
The presentation linked the decline in demand to higher prices and noted that the only government intervention during the period covered was an NNPC price reduction.
“No government interventions, besides NNPC price cut this month,” it stated.
The expected expansion of modular refining capacity comes as Nigeria’s petroleum products market adjusts to increased domestic production and changing international trade flows.
Maher-Bonnett said the Dangote refinery is operating at a high rate, with steady petrol output, reducing the attractiveness of importing some petroleum products from Europe into West Africa.
“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.
It also highlighted Ghana’s growing refining capacity, noting that the 45,000-barrel-per-day Tema refinery is ramping up production and improving the country’s self-sufficiency.
According to the presentation, the economics of shipping petroleum products from Europe to West Africa and from Europe to the United States has weakened, with freight costs further affecting the competitiveness of the routes.
Source: punchng.com
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