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Nigeria needs more refineries – OPEC

By on November 9, 2014

As demand for refined petroleum products is expected to increase in Africa, a new report by the Organisation of the Petroleum Exporting Countries says a relatively high level of product imports emphasise the need for new refining sector investments.

The report entitled ‘2014 World Oil Outlook’, released on Thursday, said demand for refined products in Africa was set to grow, adding that there was sufficient crude oil production to cover demand.

“Despite this need and the number of refining projects under consideration, there are currently only a few projects already under construction or in an advanced planning stage. The result is that only around 600,000 barrels per day of new crude distillation capacity is expected to be available in Africa by the end of 2019,” the report said.

In April 2014, the Egyptian Refining Company started construction of a 145,000 bpd refinery located northeast of Cairo.

Another large project in the advanced construction stage is Angola’s Lobito refinery, which will result in the addition of 120,000 bpd of crude distillation capacity.

In Algeria, a refinery is under construction in Tiaret, after the country inaugurated an extensive programme, which calls for four new refineries to be built gradually, each with a capacity of 100,000 bpd.

“The need for additional capacity in other large countries has led to talk of several other major refining projects. This is the case in Nigeria where options range from the rehabilitation of existing refineries, through to several new smaller projects and a large-scale new grassroots refinery,” the report noted.

A new world-scale refinery is also under consideration in South Africa.

“Africa is currently a net importer of refined products and is one of the regions where all key products, including fuel oil and the group of other products, is projected to grow.

“Recent projections indicate that even after an additional investment of almost $50bn in the period 2020–2040, the region will still be a net product importer, although the share of imports is set to decline,” the report said.

In Nigeria, there have been several proposed refineries, including 18 licensed in 2002 and three Greenfield refineries in Lagos, Kogi and Bayelsa, but none has come on stream.

The country’s four refineries operated at an average of 10.46 per cent of their combined capacity of 445,000 barrels per day in June, according to the Nigerian National Petroleum Corporation.

 

[Punch]