Relief for airlines as 11,000bpd modular refinery starts aviation fuel production in July

Niger Delta Exploration and Production plc, an indigenous oil company and marginal field operator, says its upgraded 11,000 barrels per day capacity modular refinery will go into full production in July this year with Jet A fuel as one the additions to its production.

If the plan carries through, it will come as great relief to airlines operating in the country, which currently spend 40 percent of their revenue on aviation fuel. Nigeria will also be able to conserve a huge portion of the foreign exchange currently spent in the importation of aviation fuel into the country.

Nigeria consumes over 400 million litres of aviation fuel yearly and in 2016 was the second-largest importer of aviation fuel in the world, according to Layi Fatona, managing director, Niger Delta Exploration and Production plc.

Fatona, who disclosed this at the monthly technical meeting of the Nigeria Association of Petroleum Explorationists (NAPE) in Lagos, did not disclose the exact volume of Jet A fuel that would be produced from his company’s refinery. He, however, said a significant volume of the product would be produced to help the Nigeria aviation industry and the country to earn some foreign exchange.

The Niger Delta Exploration and Production modular refinery located in Ogbele, Rivers State, was initially structured to refine 1,000 barrels per day of Automotive Gas Oil (AGO) or diesel. But having done that for some time, its promoters decided to scale up its production capacity to 11,000 barrels to accommodate more production lines for other products.

The company said it is expanding its investment in the midstream of the oil and gas sector by increasing its refining capacity from initial 1,000 barrels per day of diesel production to 11,000 per day capacity for the production of several other petroleum products.

Adebanji Ola, communications manager, Arik Air, who said he was not aware of the development, added that it would be a game changer and a big relief for the aviation sector if it succeeds.

“Aviation fuel takes 40 percent of airlines’ revenue. Aviation fuel is very technical, so this will depend on who is refining and the approval of the regulatory authorities. I hope it is well managed and approved by NNPC and NCAA. Aviation fuel is not like petrol that you can just use contaminated ones and get away with it. It depends on who is licensing and have they gone through all the necessary approvals by the concerned authorities?” Ola said.

“When all these are sorted out, this will come as a big relief to all the airlines. Currently, the price of aviation fuel is not stable. The price you get aviation fuel for in Lagos is different from prices sold in other states. The price of aviation fuel depends on forex, so if we can refine locally, definitely, it is going to be stable. This way, airlines can plan appropriately,” he said.

But contrary to Ola’s statement regarding approval by Nigeria Civil Aviation Authority (NCAA), Sam Adorogboye, public relations manager of the government agency, said NCAA does not grant approval for refining.

“It’s Department of Petroleum Resources (DPR). We collaborate with them to ensure quality control. They have the mandate and expertise,” Adorogboye said in reply to an SMS sent to his phone.

Aside from Jet A fuel, Niger Delta Exploration and Production said it would also produce other petroleum products, such as marine diesel, High Pour Fuel Oil (HPFO), Naphta, which will eventually become petrol and Liquefied Petroleum Gas (LPG).

“The refinery company is pioneering investment in midstream with train one mini refinery. But the most remarkable thing is that it is going from one product to be producing marine diesel, Jet A fuel, HPFO, Naphta which would eventually become  petrol and LPG in another one or two months,” Fatona said.

He said about 16 trucks of AGO are now being loaded from the refinery as against two several months back, stating that there was no doubt that Ogbele was gradually transforming into an energy hub.

He said Nigeria should develop more of such projects like Ogbele in future in the Niger Delta, adding that this could help to boost the country’s economy a great deal in future.
“In our thrust to address the persistent shortage, steady growth in local demand of petroleum and the company’s own refinery growth strategy, we took the strategic decision to expand the Ogbele Refinery tenfold, with additional 10,000 barrels per day of processing capacity and increased product mix,” he said.

Fatona said Nigeria can become more sufficient in petroleum products if there is more investment in modular refineries.

OLUSOLA BELLO & IFEOMA OKEKE