- Kachikwu: Nigeria’s Refining Demand May Stretch Oil Production
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has suggested that upcoming petroleum refining plants in Nigeria could place a lot of demand on the country’s oil production soon, such that it may find it difficult to meet the request of the soon-to-be completed refineries.
Kachikwu, also said the imminent recovery of refining capacity of the four refineries owned and operated by the Nigerian National Petroleum Corporation (NNPC) in Warri, Kaduna, and Port Harcourt, were part of the expected exert pressure on the country’s oil production which is currently around 2.3 million barrels per day (mb).
Government’s statistics had indicated Nigeria currently has a 445,000 barrels a day refining capacity solely accounted for by the NNPC’s four refineries.
This number is however projected to rise with the coming on stream of refineries such as the 650,000 barrels a day Dangote refinery; the Omsa Pillar Astex Company (OPAC) refinery in Delta; as well as the 12,000 barrels a day Azikel refinery, amongst others.
Kachikwu, however stated at a recent meeting at the State House in Abuja, where Nigeria and Niger Republic penned agreements to build a 150,000 barrels a day refinery in Katsina, that with crude supplies from Niger, as well as other refineries coming up, there would be little for exports.
He specifically predicted Nigeria could have challenges providing crude oil for the refineries when they all become operational.
His predictions were however supported by industry experts who suggested an immediate passage of the Petroleum Industry Governance Bill (PIGB) currently with President Muhammadu Buhari for assent, and other associate bills would pave the way for investments into more oil production and reserves increase.
“First you have the Agip refinery that studies are ongoing in Bayelsa that should cover the South-south corridor. You have the Port Harcourt refinery which when they finish refurbishing covers South-south and South-east.
“The Warri and Kaduna are all there including the Dangote in Lagos. About three marginal refineries with two coming on stream and seven with a potential of coming on stream over the next two years. Very soon our problem would be finding sufficient crude to match the requirements of a lot of these refineries,” said Kachikwu, in response to a question on refineries’ projects in the country.
He also spoke about the decision by Nigeria to partner Niger in the new border refinery project, as well as considerations for security in northern Nigeria, which has had terrorists’ attacks across its states in the last few years.
“The decision is to do a pipeline from Niger Republic into a Nigerian border town and construct a refinery with capacity probably between 100,000 and 150,000 barrels a day but it is all dependent on the Nigerien crude volumes.
“It depends on what they find, currently their number is enough to support about 60 to 70,000 barrels per day but lots of field that have been capped will be opened. We hope that as the project goes over the next two years, we will probably have more feed-stock to power a much bigger refinery,” the minister said.
He added: “It is Katsina and there is a potential for extension to Kaduna. Bear in mind this started first from wanting to build a pipeline from Niger to Kaduna refinery. At the board of NNPC we shut that down because the asset quality of the crude from Niger was not the same as our own quality crude.
“We decided to do a refinery that is targeted at the quality of their crude. The shorter the distance, the shorter the pipeline, the smaller the cost required for construction. So, that was the basis for selection.”
On concerns about insecurity, he said: “If we bother about insecurity we are not going to make progress. The security issues are there, we will deal with them. Niger hasn’t faced much of a security issue in terms of finding its crude, the distance in the pipeline corridor is going to be short and hopefully technology will bury it sufficiently not to be an issue.”
