The Nigerian National Petroleum Corporation (NNPC), on Tuesday hinted that the nation’s much awaited refinery overhaul projects will begin as soon as the second quarter.
International news agency- Reuters quoted Anibor Kragha, the corporation’s chief operating officer in charge of refineries and petrochemicals, as telling delegates at the African Refiners Association conference in Cape Town that talks with consortiums including top traders, energy majors and oil services companies to revamp the long-neglected plants and reduce reliance on imported fuel are in the final stages.
NNPC’s three oil refineries in Port Harcourt, Warri and Kaduna have total capacity of 445,000 barrels per day (bpd), but their operating capacities are far from that level owing to years of neglect.
He was quoted as saying: “We believe that by the second quarter of this year we will …start getting the ball rolling on the refurbishment and rehabilitation exercise and believe this will run to the end of next year.
“We are working with consortia right now, negotiating terms, trying to finalise the time sheets so that we can access the money… through the end of 2019 when we believe we will have the minimum 90 percent capacity utilization in place,” he added.
According to NNPC reports, the highest capacity utilization last year was just under 37% percent, and it fell as low as 5.92% in November.
Nigeria imports roughly 900,000 tonnes of gasoline every month, accounting for 60% of West African imports of the fuel, meaning its choices on fuel quality are likely to impact the entire region.
Nigeria will lower the top level of sulphur in diesel to 50 parts per million (ppm), from 3,000 ppm, by July 1, Kragha, told the ARA.
Nigeria is targeting a cut to 150 ppm by October 1, 2019, Kragha said.
James McCullagh, analyst with Energy Aspects, said that meant“NNPC currently has the right — rather than the obligation — to actually import it (cleaner fuels).”
“This latest move would merely crystallise that obligation,” he said.
Kragha told journalists in Cape Town that the Nigeria’s ministries of Environment, Health, Petroleum Resources and Industry and Trade were working together to finalise rules that would be distributed to importers at some point in the second quarter.