The Nigerian National Petroleum Corporation (NNPC) has revealed the existence of almost $3.097 billion investment opportunities in Nigeria’s condensate refineries’ space. This is as the corporation has pointed out that it requires between $1.6 billion and $2.7 billion to improve the supply and distribution of petroleum products, revamp Liquefied Petroleum Gas (LPG) infrastructure and build Compressed Natural Gas (CNG) plants in the country.

This disclosure was made by the Group Managing Director of NNPC, Mallam Mele Kyari, while delivering his keynote address at the 15th Oil Trading and Logistics (OTL) Africa Downstream Week themed, “Downstream in Transition: Getting Set”, on Tuesday in Lagos, according to ThisDay.

Kyari, who was represented at the event by the Group Executive Director, Downstream, NNPC, Mr. Adetunji Adeyemi, projected that Nigeria’s petroleum product demand would increase from 15.1 million MT in 2020 to 17.3 million metric tons by 2025.

What the Group Managing Director of NNPC is saying

Kyari said that the country would need a refining capacity of about 1.52 million barrels per stream day (MBPSD) to meet its petrol requirement in the next 4 years.

He said, “As Nigeria’s demand for petroleum products is expected to grow from 15.1 million MT in 2020 to 17.3 million MT by 2025, the country needs a refining capacity of about 1.52 million barrels per stream day (MBPSD), to meet its PMS requirement in the next four years.

“The NNPC refineries’ 445,000 BPSD and Dangote Refinery’s 650,000 BPSD running at 60% and nameplate capacity, respectively, would supply 76 per cent of that requirement, leaving a shortfall of about 17 million litres of PMS daily.

“NNPC is adding 215,000 BPSD of refining capacity through private sector driven co-location at the existing facilities in PHRC and WRPC, respectively. Modular refineries are also adding capacities, such as the 5,000 BPSD Waltersmith refinery, which will be upgraded to 50,000 BPSD.

“Additional 250,000 BSPD is expected to come from the Condensate Refineries through the private sector partnership. The co-location and condensate refineries will close the PMS supply-demand gap and create positive returns to the investors.

“About $3.097 billion investment opportunities exist in condensate refineries while $1.6 – $2.7 billion is required by NNPC to improve the supply and distribution petroleum of products, revamp LPG infrastructure and build CNG plants.”

Kyari said the demand for natural gas could grow about four times over the next 10 years, increasing from 4.8 billion cubic feet per day (bcf/d) in 2020 to between 10 – 23 bcf/d in 2030.

He said, currently, supply to the domestic market was about 8bcf/d to power, 0.77 bcf/d to industries, and about 54 bcf/d was flared, while 3.2 bcf/d was for export gas through the LNG and the West Africa Gas Pipeline (WAGP).

What you should know

The Federal Government, with the signing and implementation of the Petroleum Industry Act (PIA), has sought to attract investments that have eluded the oil and gas sector for decades.
The need for more investments is due to the expected increase in the world oil demand from 90.6 million bpd in 2020 to 108.2 million bpd in 2045, after the pandemic.
The OPEC data further stated that the rise in demand would be driven by growth in world population, which is set to expand to 9.5 billion by 2045, and the huge potential for expanding access to modern energy services for the under-served.
The federal government through the NNPC had sought for more investment in both the upstream and the downstream sectors of the oil industry especially with the rehabilitation of critical downstream infrastructure comprising of major pipelines, depots and terminals through the Build, Operate and Transfer (BOT) financing model.