A.A. Rano joins race, targets 45,000bpd refinery

Not too long ago, it would have been a daunting task to convince Nigerians that in less than a decade, there would be tangible prospects of the establishment of over a dozen modular refineries across the country.

However, from a state of absolute inactivity and excessive caution, Nigeria’s downstream sector has recently witnessed an influx of investments that suggest the country’s perennial issues with fuel scarcity might just be nearing an end.

The unprecedented boom in modular refinery establishment and construction is predominantly fuelled by indigenous oil companies seeking to optimize the downstream value chain.

A. A. Rano, arguably the biggest oil marketer in Northern Nigeria and by extension the Central African region, has initiated a five-year plan to establish a 45,000 barrel per day (bpd) modular refinery in the Lekki Free Trade Zone (LFTZ) in Lagos.

The refinery will rely on critical infrastructural support springing up around the LFTZ in terms of pipelines delivering crude from the Niger Delta and the integration of a rail network to facilitate intermodal evacuation of products from the location, Dr. Ghali Mustapha, Group Head, Liquefied Petroleum Gas (LPG) told M&P in an interview at the Nigeria Petroleum Summit in Abuja.

“There are so many factors we have considered and we have decided to settle for LFTZ because of the very impressive and conducive investment climate. We also considered the importance of access to feedstock and the alternatives of evacuating products by either rail or sea to reach a decision to locate the refinery in Lekki, Lagos.

Mustapha said that what A. A. Rano had done was to key into the policy direction of the federal government which at the moment was tilted in favour of establishing modular refineries in order to complement production of petroleum products from the poorly performing state-owned refineries.

“A.A. Rano relies on the policy direction of the government to guide its strategic decisions. The government is making efforts to revamp the nation’s refineries and our company is part of the discussions”, he said.

Mustapha noted that A. A. Rano was part of the delegation led by Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu to Niger Republic for bilateral talks on the construction of a refinery along with a crude oil pipeline in the border town between Niger and Katsina State.

“We are glad that the government is looking find solutions to the problem of fuel shortages and in doing so, is carrying all the stakeholders along in consultations”, he said.

M&P was informed that A.A. Rano is part of the on-going negotiations for private sector investments targeted at rehabilitating and replacing Nigeria’s aging petroleum products distribution network as espoused by the Minister of State for Petroleum Resources.

Mustapha further stated that A. A. Rano has moved from downstream into midstream- “we are one of the major offtakers of crude oil from the NNPC, we are in partnership with the IOCs and we are also looking at future exploration of some fields in which we have a stake”, he said.

While noting that the organisation had established a presence in the Republic of Niger for the purpose of importation of petroleum products especially Automotive Gas Oil (AGO), he added that they were in talks with several investors’ delegations from countries across the West and Central Africa sub-region in view of setting up presence in those countries to meet their energy demands.


M&P Nigeria

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