NNPC canvasses for $32.61b to revamp refineries, pipeline infrastructure

From right: NNPC Group Managing Director Mele Kyari; Adetunji; and Group Public Affairs General Manager Garbadeen Mohammed; during their appearance before the House of Representatives Committee on Petroleum (Down Stream) in Abuja. Photo: Lucy Ladidi Ateko (The Guardian)

NNPC canvasses for $32.61b to facilitate pan-African oil networks

By Jeph Ajobaju, Chief Copy Editor

About $32.6 billion investment is required to revamp refineries, pipelines and downstream infrastructure, the Nigerian National Petroleum Company (NNPC) has disclosed.

The amount was tabled by NNPC Downstream Group Executive Director, Adeyemi Adetunji, at a conference organised by the African Refiners and Distributors Association (ARDA) in Cape Town, South Africa.

Adetunji spoke of plans to co-locate an African Refinery around the Port Harcourt Refinery and a condensate refinery, and said a combined capacity of NNPC related refinery would hit 1.27 million barrels per day (mbpd) of crude processing.

Abuja approved in March 2021, $1.5 billion for the overhaul of Port Harcourt Refinery and the NNPC awarded the contract to Italy’s Tecnimont.

Adetunji told the conference the refurbishment of the refinery is in top gear and would be ready in the second quarter of 2023.

The news comes after the contract for the overhaul of Kaduna Refinery was awarded to Daewoo Engineering Nigeria at an estimated maximum cost of $740,669,600 with a duration of 21 months.

Adetunji stressed the need to improve refining capacity in Africa along growing demand.

“We are on a journey of renewal and growth. The plan is to revive the existing refineries, make them functional and grow our supply capacity,” he said.

“In the next couple of years, this will grow to about 1.27 million barrels per day throughput for all the refineries, including the much-celebrated Dangote Refinery.

“We have another project that’s been developed now and at an advanced stage called the Africa refinery, which will be co-located at the Port Harcourt Refinery.”

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Pan-African networks

The NNPC acquired 20 per cent stake in Dangote Refinery for $2.76 billion, and the Warri Refinery with installed capacity of 125,000 bpd is under rehabilitation.

Adetunji sought regional connected pipelines and depots networks as a starter for refinery investment in Africa and then pan-African networks, per The Guardian.

He pushed for refinery products consolidation to balance output based on aggregate demand on the continent, as well as harmonisation of laws, regulations, policies and tariffs to facilitate intra Africa flow of products (hydrocarbon taxes, Africa Free Trade Agreement, implementation of Afri fuels standards, et cetera).

He said an Africa Energy Strategy that includes both existing and clean fuels is sacrosanct, and there is need for the continent to support the African Energy Bank.

ARDA Executive Secretary  Anibor Kragha gave reasons to scale up energy security through the exploitation of energy resource base.

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 products imports.

If properly harnessed, Kragha stressed, the continent would be able to balance rising population with energy needs and on a long term transit to cleaner energy sources.

“What is driving us as ARDA, despite what happened globally, is that energy demand will grow through 2040 due to population growth and industrialisation across Africa,” he added.

“Energy security is the short term priority we have. We are not the biggest polluter in the world; hence we are focusing more on uninterrupted, secure and affordable supply of energy.

“Storage and distribution infrastructure including pipeline and storage should be a focus. We cannot have a dialogue about refineries without storage.”

Jeph Ajobaju:
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