NNPC seek $32.61b for refineries

Nigeria’s state-run oil company, the Nigerian National Petroleum Company (NNPC), has announced that an investment of about $32.6 billion will be required to revamp its refineries, pipelines, and downstream infrastructure. The NNPC Downstream Group Executive Director, Adeyemi Adetunji, revealed this at a conference organized by the African Refiners and Distributors Association (ARDA) in Cape Town, South Africa. He spoke of plans to co-locate an African Refinery around the Port Harcourt Refinery and a condensate refinery. Adetunji said a combined capacity of NNPC related refineries would reach 1.27 million barrels per day of crude processing.

The NNPC has approved a $1.5 billion overhaul of the Port Harcourt Refinery, and the contract has been awarded to Italy’s Tecnimont. The refurbishment of the refinery is expected to be completed in the second quarter of 2023. The contract for the overhaul of the Kaduna Refinery has also been awarded to Daewoo Engineering Nigeria at an estimated maximum cost of $740,669,600 with a duration of 21 months. Adetunji said the need to improve refining capacity in Africa is crucial along with growing demand.

Adetunji has sought regional connected pipelines and depots networks as a starter for refinery investment in Africa and then pan-African networks. He pushed for refinery products consolidation to balance output based on aggregate demand on the continent, as well as harmonization of laws, regulations, policies, and tariffs to facilitate intra-Africa flow of products. He said an Africa Energy Strategy that includes both existing and clean fuels is sacrosanct, and there is a need for the continent to support the African Energy Bank.

ARDA Executive Secretary Anibor Kragha emphasized the need to scale up energy security through the exploitation of energy resource bases. According to him, rehabilitation of Africa’s refineries, which ARDA said would cost over $15 billion, should be a priority to ensure continuous exploitation of resources instead of depending on petroleum product imports. If properly harnessed, Kragha stressed, the continent would be able to balance rising population with energy needs and transit to cleaner energy sources in the long term.