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August 21, 2014
Greenfield Refinery Initiative
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The West & Central African Region consists of 18 countries from Mauritania in the North to Angola in the South. Total population is estimated at 290 Million with a GDP of about $340 billion. Nigeria accounts for about half of the regional population.

Greenfield Refinery Projects Division

NNPC Greenfield Refinery Projects Division (GRPD) came into existence late 2005 as a strategic response to a lack of visible progress on the 18 Licenses issued by Government for Private Refineries in 2002 and also, the negative consequences of massive importation of petroleum products against the backdrop of low capacity utilization in the existing three (3) refineries (445KBD capacity).

In view of urgent need for increasing in-country crude oil refining capacity and the inability of Private Investors to perform due to lack of project development capabilities and credible foreign financiers/technical partners, it has become apparent that NNPC would have to lead the promotion of new private refineries.

Nigeria is currently deficit in the supply of white petroleum products, most of which are currently imported into the country.  Current consumption of gasoline or Premium Motor Spirit (PMS) is estimated at 35 million litres per day, while that of kerosene is 10 million litres per day.  In order to meet the deficit in supply, Nigeria currently spends between $12 and $15 billion annually and it is the desire of Government to stem the flood of imports by investing in additional refining capacity along with interested Equity Participants.

Recent Studies by stakeholders in the industry have revealed that a new refining capacity of at least 420 KBPD would be required to meet the existing refining gap. If this gap is projected to 2016 at the growth rates of between 3% and 5% per annum, the estimated refining gap in Nigeria by 2016 would be 500-560 KBPD. This forms the basis of the current effort to establish at least three (3) new refineries of approximately 400-550 KBPD capacity in Lagos, Bayelsa and Kogi States.

Vision Statement:

To promote the development of Oil and Gas Process Plants for the elimination of domestic and regional deficits in petroleum products and Hydrocarbon derivatives

Mission Statement:

To develop Industrial Parks for the establishment of Oil and Gas conversion Plants and associated utilities through strategic alliances and profitable businesses that will participate competitively in domestic, regional and International markets.

Current Business Direction

NNPC does not intend to build Greenfield Refineries on a sole risk basis. The strategy is to develop investment consortia (in partnership with other prospective local and foreign investors) for these projects while holding reasonable but minority interests. The refineries will be ring-fenced refineries to be operated strictly on a commercial basis; completely market oriented and profit motivated and as such issues of location, configuration and shareholding structure will be determined not solely by NNPC but by the consortia collectively.

The refineries will be modern state-of-the-art facilities and will yield very high percentage of white petroleum products. It is intended that the proposed ventures would operate as import substitution refineries, supplying refined products to consumers in the Nigerian domestic market and export surplus to regional and other international markets.

The successful development of each new refinery will create enormous opportunities to transform Nigeria into a refining and trading hub in the region. This implies that all other countries in the West and Central African region will look up to Nigeria for supply and discontinue importation from North West Europe, Middle East and Asia. This should stem the flood of imports into the region and reverse the flows outwards from Nigeria.

Structure/Department/Unit

Pursuant to the corporate objective of adding value to the nation’s oil and gas resources by establishing downstream hydrocarbon processing plants, Greenfield Refinery Projects Division is structured with two departments aimed at achieving the objective. These are Crude Oil Conversion Department and Gas Conversion Department. The purposes of these departments basically are to:

a.    Develop Conceptual business plans for downstream processing that include crude oil refining and associated petrochemicals plants and natural gas processing plants like petrochemicals and fertilizers plants.

 

b.    Develop and manage strategies for the promotion of investment in the in new downstream crude oil and natural gas processing plants in partnership with the private sector investors.

 

c.    Coordinate the provision of the engineering and technical support required to ensure the technical, commercial and economic viability of new downstream processing plants projects.

 

d.    Provide engineering and technical services covering Project Development and Execution Activities of new downstream processing plants that include the Feasibility Studies, Basic Engineering Designs, Process Technologies Licensor selection, Front End Engineering Design (FEED), Detailed Engineering Procurement and Construction (EPC) and Commissioning.

Products & Statistics

Detailed Feasibility Studies undertaken by Messrs Wood Mackenzie Energy Consulting Limited and Messrs Foster Wheeler Energy Limited in 2011 for three Greenfield Refineries to be located in Lagos, Bayelsa and Kogi States confirmed that all three refineries would be economically feasible at the respective sizes of 200,000 BPD for Lagos, 100,000 BPD for Kogi and 100,000 BPD for Bayelsa. With the introduction of these refineries, the following additional volumes of petroleum products shall be available for domestic consumption:

Crude Oil Feed and Products Yield Pattern

FEED

Lagos

Refinery

Bayelsa Refinery

Kogi Refinery

TOTAL

Crude Oil , BPSD

200,000

100,000

100,000

400,000

PRODUCTS

196

96

98

390

LPG, Tons/Day

Premium Motor Spirit (PMS), Liters/Day

14,248,626

6,408,018

7,124,313

27,780,957

Dual Purpose Kerosene (DPK), Liters/Day

3,289,392

2,606,805

1,644,696

7,540,893

Automotive Gas Oil (AGO), Liters/Day

12,410,586

6,032,142

6,205,293

24,648,021

Light Sulphur Fuel Oil (LSFO), Liters/Day

578,124

230,073

289,062

1,097,259


Office Address:

Group General Manager, Room 308, 3rd Floor, Block D, NNPC Towers Herbert Macaulay Way, Central Business District, Abuja.

E-mail:                          Sylvester.idemudia@nnpcgroup.com

Telephone:                     09-460-84310