The Federal Gov- ernment is look- ing to boost local supply in fuel with modular refineries after unsuccessful attempts at attracting investors to build bigger refineries in the country. The government is cur- rently working to develop a policy that will encourage the establishment of modu- lar refineries with capacity between 10,000 and 25,000 barrels per day (bpd).
Platts reports that Tim Okon, coordinator, plan- ning and strategy, Nige- rian National PetroleumCorporation (NNPC), told newsmen on Monday, that, “The government is working on a policy to de- velop modular refineries of 10,000-25,000bpd. The policy would be implement- ed once the NNPC is able to finalise the issue of the eco- nomics, the environmental impact assessment, and other logistics”.
According to Platts re- port, Okon said stalled re- forms in the oil sector and uncertainty in revenue expectations continue to hold back investors despite been given licences to build refineries.
According to the US En- ergy Information Adminis- tration (EIA), Nigeria’s four state-run refineries, two inits main Port Harcourt oil hub, one in Warri, and one in Kaduna has a combined capacity of 445,000bpd. Nigerian refineries have operated below 30 percent since 2002 and refineries operating below 70 – 80 percent are considered to operate below capacity.
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They are poorly maintained and Nigeria imports more than 80 percent of its fuel needs. The country con- sumes about 40 million litres of fuel per day. BusinessDay investiga- tion shows that since 1989 till date the country has not added any assets to its refin- eries and the ones available are even deteriorating.
This initiative, however, will focus more on building an enabling environment to facilitate private sector involvement in boosting domestic supply of fuel in the country. Also commenting on the issue, Ohi Alegbe, NNPC spokesperson, said in a phone interview with BusinessDay, “It is a pri- vate sector driven initiative, where the government will provide an enabling environment so that we can have more players and refineries to boost domestic fuel supply”.
Setting up modular refineries at strategic de- mand locations would be a stop-gap pressure reducing measure to the product demand challenges.
