Enhanced Capacity: Nigeria leads Africa’s refining revolution

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…Faces stiff competition from West African neighbours

The resuscitation of Nigeria’s under-performing refineries is a Key Performance Indicator for the current administration of the Nigerian National Petroleum Corporation (NNPC).

Mele Kyari, the Group Managing Director, upon assumption of office promised to fix the four refineries before the end of May 2023 and transform Nigeria into a net exporter of petroleum products in the same period.

He explained that NNPC would encourage Public Private Partnership in the revamp of the refineries and would also support involvement of private individuals in building of conventional and modular refineries.

Kyari issued a January 2022 completion timeline for full rehabilitation of all four of Nigeria’s refineries which include the northern Kaduna refinery, Warri refinery and the two plants located in Port Harcourt, which have operated below capacity due to years of neglect.

The first phase of the upgrades was announced in March 2019, with Italy’s Maire Tecnimont hired to handle initial scoping of the 210,000 b/d Port Harcourt refinery complex, with oil major Eni appointed as technical adviser.

Full repair work on all four plants was scheduled to start in January 2020. Tecnimont will handle the remainder of the repair work needed for Port Harcourt, while Kyari did not name the contractors that will handle the overhaul of Kaduna and Warri refineries.

In the final quarter of 2019. the NNPC said it hoped to take a final investment decision for its condensate refinery project by July 2020. The Corporation signed the front-end engineering design (FEED) for the construction of the plant — which will be located in the Niger Delta — with engineering firm KBR. NNPC is partnered in the project by indigenous oil producer Seplat Petroleum. NNPC first announced in August 2018 plans to build a condensate refinery with capacity to refine 200,000 b/d of the condensate oil produced by the country.

The country has also reached an agreement with its neighbour, Niger, to build an oil refinery in a border town between Niger and Katsina state in northern Nigeria.

In the private sector, the Dangote Oil Refinery, set to be Africa’s biggest refinery at 650,000 b/d, has completed 75 per cent of its construction and remains on track to start processing crude by early 2021, company officials said.

The plant will use Nigerian crude. Officials said that the arrival of key components of the refinery late last year, after initial delays, had bolstered confidence that construction will be complete by end-2020.

“Construction work on the refinery has hit 75% completion. The port terminal is ready and we have begun installation of the key fluid catalytic cracking unit,” an official said.

The fluid catalytic cracker, built by Sinopec, was delivered to the refinery last December, the official said. Work on the refinery, initially billed to come on stream in 2019, had been delayed first by the scarcity of foreign exchange. Construction of the Dangote Refinery began in 2013.

On a smaller scale, Nigeria hopes to have its first modular oil refinery, built in the Niger Delta region, come on stream in May 2020, officials of the Ministry of Petroleum Resources said.

Modular refineries are crude oil processing facilities with capacities of up to 30,000 b/d and these are being built as part of plans to curb oil theft and promote peace in the country’s main oil producing region and enhance the otherwise stagnant refining capacity.

According to the ministry, the Waltersmith Modular Refinery in Ohaji/Egbema, in southern Imo state, will consume 5,000 b/d of crude in the first phase, producing gasoline and diesel. The plant’s production capacity will be subsequently increased to 25,000 b/d of crude and condensate and will produce in addition LPG, kerosene and aviation fuel.

Nigeria is receiving a run for its money in its ambition to become the hub for refined petroleum products in the West and Central Africa sub-region as other African countries have also joined the race to attain self sufficiency.

The reconstruction of Cameroon’s Limbe refinery, which suffered from a fire in May 2019, was not expected until 2021. Four out of 13 units were completely destroyed and three partly damaged.

Meanwhile, Cameroon officials talked to Russian oil companies during the Russia-Africa summit in Sochi about the potential participation of Russian companies in rebuilding the refinery, according to reports.

Cameroon’s sole refinery is one of the few in the region to have undergone a successful upgrade program over the past two years. The refinery increased its capacity to 72,000 b/d from 45,000 b/d through the upgrade, which involved the construction of a vacuum distillation unit, a catalytic reformer and a power plant.

Nigeria’s regional rival, Ghana, is continuing to operate its sole oil refinery, Tema, intermittently after years of stopping and starting due to technical and financial problems. The CDU only has one furnace and is operating at around 25,000-26,000 b/d. Tema has been hit by several issues over the past few years, experiencing intermittent outages at its CDU and FCC units.

Furthermore, Ghana’s ministry of energy is in the process of submitting a proposal to build a new refinery in Tema. It will replace the 45,000 b/d Tema Oil Refinery. Separately, the government had set its sights on building a 150,000 b/d refinery in Takoradi.

In Cote d’Ivoir, the SIR has secured a $657 million debt financing deal from the Africa Finance Corporation (AFC) which will help fund the upgrade of the refinery, while the Republic of Congo’s refinery in Pointe Noire is planning to build a fluid catalytic cracker before 2022.

In Senegal, the Dakar refinery is running at full capacity of 1.2 million mt/year. There are plans to increase capacity to 1.5 million mt/year.

Following in Nigeria’s footsteps, Equatorial Guinea plans to start construction on two modular refineries, each with a capacity of at least 20,000 b/d, by the end of 2020, the country’s energy minister said.

The facilities will allow the country, which currently has no oil refineries, to meet its own refined product needs and export fuels to its neighbours, Gabriel Obiang Lima told reporters at the Atlantic Council Global Energy Forum in Abu Dhabi.

In November, Obiang said one of the refineries will be built at the Punta Europa complex located on Bioko Island, which is home to the bulk of its gas resources. Obiang said crude for this plant will be supplied from its Zafiro and Aseng fields and it will focus on producing gasoline, gasoil, kerosene and jet fuel, he said at the time. He also said the second modular refinery project will be located on the mainland, next to its regasification plant at Cogo, and will also run local crudes.

Meanwhile, the Africa Finance Corporation has signed an agreement with Brahms Oil Refineries Limited to co-develop a refinery and storage terminal in the West African country, according to a joint statement.
The deal means AFC will work on the development and subsequent financing of a petroleum storage and associated refinery project in Kamsar, Guinea.

This will include a 12,000 b/d modular refinery, a 76,000 cu m crude oil storage terminal, a 114,200 cu m storage terminal for refined products, and ancillary transportation infrastructure. Guinea currently has no refineries and is entirely dependent on imports from neighbouring Ivory Coast and Senegal for its fuel needs. AFC said the 12,000 b/d refinery will help the country meet a third of its demand for refined products.

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