A Review of the Nigerian Energy Industry

NNPC refineries targets 90% production capacity

*Greenfield refineries to make Nigeria self-sufficient

Oscarline Onwuemenyi

22 January 2012, Sweetcrude, Abuja – The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Austin Oniwon has assured that the existing three refineries in the country would come up to 90 percent production capacity by December 2013.

Oniwon, who gave the commitment over the weekend while speaking with journalists, said the on-going turn-around maintenance of the refineries was part of effort towards ensuring adequate local refining of petroleum product.

He admitted that the nation’s refineries were not doing well but assured that NNPC has designed refinery revitalization working plan using the original contractors that built the refineries.

According to the GMD, the Port Harcourt refinery will commence the projected capacity production by the fourth quarter of 2012 to be followed by Kaduna refinery by the first quarter of 2013, while Warri refinery will come on stream by the fourth quarter of 2013.

Onwion said, “In my presentation last week before House of Representative Ad-hoc Committee on the Monitoring of the Subsidy regime, I made clear that at 90 per cent, the three refineries will be able to produce 20.3 million liters of PMS, 9.2 million liters of kerosene and 15.3 liter of diesel as compared to the average national daily consumption of 35 million liters of PMS, 10 million liters of kerosene and 12 million liters of diesel.”

Assuring that his work plan is achievable, Onwion tasked Nigerians to be on watch out and monitor the implementation adding that, the public should NNPC management accountable over the promise.

The NNPC boss further noted that the coming on stream of three Greenfield refineries to be built by Chinese companies will not only make Nigeria to be self sufficient in petroleum products, but will also become net exporter of petroleum products which he said is in line OPEC objectives.

“NNPC aims to accelerate the construction of new refineries in Nigeria to stem the flood of imported refined products into the country, currently estimated at 10 billion dollars,” he said.

The new refineries are expected to add some 750,000 barrels per day capacity in Nigeria and position NNPC in the international trading of refined petroleum products, it said.

Nigeria’s four refineries — with total capacity of 445,000 barrels per day — are using less than 30 percent of their installed capacity, according to official figures. Corruption and poor maintenance have undermined their performance.

“We are very excited about the deal. We thought it is the biggest ever in Africa, although I do not have the details yet.”

He added that the construction of the new refineries “will reinforce the ongoing oil and gas reforms in Nigeria”, as envisaged in legislation which has been before the Nigerian parliament for almost a year and imminent deregulation of the downstream sector the country’s oil industry.

Oniwon had observed in his presentation last week that regular incidence of pipeline vandalism across the country had hampered the efficient distribution of petroleum products.

“In December, 2011, we had to shut down the Port Harcourt refinery because the pipeline supplying crude to the refinery was severely vandalized,” Oniwon said.

The NNPC helmsman said that if the pipelines are made to work, the bridging cost of N5.80k will not be borne by Nigerians and will go a long way in revamping the Pipeline Product Marketing Company depots across the country.

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