Nigeria Will Lead Africa’s Refining Capacity Growth In 4 Years – Report

Data and Analytics Company, Global data has stated that Nigeria is set to lead refining capacity additions from planned and announced (new-build) projects in Africa by 2024.

The company’s report, ‘Global Refining Industry Outlook 2020 to 2024 – Capacity and Capital Expenditure Outlook with Details of All Operating and Planned Refineries’, reveals that Nigeria would add 1.8 mmbd of planned and announced crude oil refining capacity by 2024.

Of this, 1.1 mmbd comes from the planned refineries, while the early-stage announced projects contribute the remaining 0.7mmbd by 2024.

Adithya Rekha, oil and gas analyst at GlobalData was quoted in the report as saying that, “Out of 64 upcoming refineries in Africa, a total of 43 planned and announced refineries are expected to start operations in Nigeria during the period 2020–2024. However, given the delays faced by new refineries in the country, including the Dangote refinery, it remains to be seen how many of these refineries operations by 2024 start.”

GlobalData expects South Africa to be the second-largest country in Africa in terms of planned and announced refining capacity additions.

It is likely to add 445 mbd of refining capacity by 2024. The Coega refinery accounts for most of the capacity additions in the country with 400 mbd. It is expected to start operations in 2022.

Egypt occupies third place in Africa with planned and announced refining capacity of 209mbd by 2024. The Soukhna refinery is the largest upcoming refinery in the country with an expected refining capacity of 155mbd. This planned refinery is likely to start operations in 2021.A

At the weekend, President of Dangote Group, Alhaji Aliko Dangote , had said that his 650,000 barrels per day refinery is expected to have concluded tests by the beginning of next year and commence operations in the first quarter of 2021.

He also explained the progress of the refinery, saying: “Right now, we have reached over 48 percent but majority of the equipment’s when they come are just going to be installed. We have done all the foundations as you have seen and first of all we want to thank the Governor, Deputy Governor for visiting here just to justify the help they have given to us.

“They were here last year and one of the reasons they are supporting us is that eventually we are going to help in terms of not only creating jobs but also in reducing the outflow of foreign exchange not only in petroleum products but also in petrochemicals, fertilizers and co. We would be one of the highest foreign exchange generating company going forward.

“It is a huge project and that is why we have built a jetty and the pipeline which we are bringing in the crude.

“I must confess that without the government support, there is no way we would have done what we have done so far. And I think we must thank Mr. President for his policies and we thank the CBN management for generally bringing down interest rates so that it can encourage other entrepreneurs to go into mega projects like this. We should not wait for foreign investors to come and develop our economy, it would never happen. So we have to do it ourselves.”

He added: “We have been complaining that interest rates are high so now that interest rates are low and banks are being forced to lend money out, entrepreneurs should come out with their seed capital to borrow more money so we can develop our country.”

On the impact of the industries to economy, he said: “Nigeria would become the biggest and only urea exporter in sub Saharan Africa for the first time. And we are not only exporting, we would be exporting big time between us and Indorama, this going to about 4.5 million tons of urea which is fertiliser annually.

“We also have polyethylene which is about 1.3 million tons annually. These two products would bring in something like about $2.5 billion annually in terms of foreign exchange. A lot of foreign exchange would now come in and that $2.5 billion is only about 10 percent of remittances.

Secondly, Nigeria would now become the largest exporter of petroleum products in Africa from our own domestic crude.

“Apart from that, there are other areas which the Central Bank has sort been encouraging us with financial encouragement which is also given us hope to carry out projects and that they would help with whatever they can.”

Godwin Emefiele, Governor of Central Bank of Nigeria said : “We need to thank Aliko Dangote for the determination and his large heart. This is not a project that an ordinary person could have ever have contemplated. I was here in 2016, 2019 and I’m also here today.

“The Central Bank is interested because there is a need at this time for us to diversify the base of Nigerian economy from oil into other areas where we can earn revenue.

“The fertiliser plant which would start commercially in May 2020 would curb the fertiliser scandals and importation. The president in his wisdom said we would no longer import fertiliser and this fertiliser plant of Dangote is 10 times of that of Notore and this plant would generate $1 billion annually. And the fertiliser would be used for our domestic consumption to help our agriculture transformation and the rest. 75 percent would be exported and we would earn $750 minimum only from fertilisers.”

SOURCE: oglinks.news