- Seven modular refineries are projected to commence operations in Nigeria in 2027, adding a combined capacity of 83,000 barrels per day.
- Four modular refineries were operating in the country in September, with a combined capacity of 32,000 barrels per day.
- Argus Media’s George Maher-Bonnett disclosed the projections at the OTL Africa Downstream conference in Lagos.
- The expansion is expected to increase domestic refining capacity as Nigeria’s fuel demand declines.
- The presentation also highlighted rising self-sufficiency driven by increased output from the Dangote Petroleum Refinery.
Nigeria’s modular refining capacity is projected to increase significantly in 2027, with seven new facilities expected to begin operations and add a combined 83,000 barrels per day to the country’s refining capacity.
George Maher-Bonnett of Argus Media disclosed this during a presentation at the OTL Africa Downstream conference in Lagos on Wednesday, where he examined developments in Nigeria’s petroleum products market and the changing dynamics of the African energy sector.
In his presentation, titled ‘African Energy Outlook’, Maher-Bonnett said four modular refineries were operating in Nigeria in September, with a combined capacity of 32,000 barrels per day.
He projected that seven additional facilities would commence operations next year, bringing 83,000 barrels per day of new capacity into the sector.
The proposed additions would represent more than two and a half times the combined capacity of the four modular refineries operating in September. However, the presentation did not disclose the names, ownership, locations, individual capacities or commissioning schedules of the seven proposed facilities.
The expected expansion comes as Nigeria’s domestic refining industry adjusts to increased local production and changing demand for petroleum products.
Maher-Bonnett also highlighted the growing contribution of the Dangote Petroleum Refinery to the country’s fuel supply, noting that its increased output was improving Nigeria’s self-sufficiency in petroleum products.
The presentation, however, reported a decline in Nigerian fuel demand during the year, attributing it to higher pump prices.
It also noted that the only government intervention during the period covered was a price reduction by the Nigerian National Petroleum Company.
According to the presentation, the Dangote refinery, with a capacity of 700,000 barrels per day, was operating at a high rate, with steady petrol output.
The increased production was also affecting regional fuel trade, reducing the attractiveness of importing some petroleum products from Europe into West Africa.
The presentation further identified Ghana’s Tema refinery, with a capacity of 45,000 barrels per day, as another facility increasing production and improving the country’s domestic supply position.
It added that the economics of shipping petroleum products from Europe to West Africa and from Europe to the United States had weakened, with freight costs further affecting the competitiveness of the routes.
The projected addition of 83,000 barrels per day from seven modular refineries would expand Nigeria’s domestic refining capacity, potentially increasing the contribution of smaller facilities to local petroleum products supply.
However, the presentation did not provide details on the proposed refineries or their individual development timelines. Their projected contribution therefore remains dependent on the facilities commencing operations as expected in 2027.
The market is also experiencing a shift as increased domestic refining, particularly from the Dangote refinery, changes the country’s reliance on imported petroleum products and affects fuel trade across West Africa.
At the same time, the reported decline in Nigerian fuel demand, attributed in the presentation to higher prices, presents another dimension to the changing market.
“Four modular refineries operating in September, total 32,000 b/d capacity,” George Maher-Bonnett of Argus Media said in his presentation.
“Seven new modular refineries to start next year,” he added.
“Nigerian fuels demand is down this year,” the presentation stated, attributing the decline to “higher flat prices”.
“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.
The seven proposed modular refineries are expected to begin operations in 2027, adding a combined 83,000 barrels per day of capacity. The presentation did not provide individual commissioning dates or further details about the projects.
Nigeria’s modular refining sector is projected to gain 83,000 barrels per day in capacity from seven new facilities in 2027, as increased domestic production and changing fuel demand reshape the country’s petroleum products market.
SOURCE: BizWatchNigeria.Ng