Nigeria’s refining capacity to rise as seven modular refineries target 2027 take-off

•Port Harcourt Refinery Nigeria’s domestic refining capacity is projected to receive a significant boost in 2027, with seven new modular refineries expected to begin operations at a combined capacity of 83,000 barrels per day.

The projection, made by George Maher-Bonnett of Argus Media, points to an expansion of smaller refining facilities as Nigeria gradually shifts towards greater domestic production of petroleum products. Maher-Bonnett disclosed this on Wednesday during a presentation titled African Energy Outlook at the OTL Africa Downstream conference in Lagos, reports The PUNCH. He said Nigeria had four operational modular refineries in September, with a combined installed capacity of 32,000 barrels per day. “Four modular refineries operating in September, total 32,000 b/d capacity,” he stated. He added that seven additional facilities were expected to commence operations next year, with a combined capacity of 83,000 barrels per day. If realised, the projected additions would increase Nigeria’s modular refining capacity by more than 250 per cent compared with the combined capacity of the four facilities operating in September. However, the presentation did not disclose the names, ownership, locations or individual capacities of the proposed refineries, leaving questions about their commissioning timelines and readiness for commercial operations. The anticipated expansion comes amid significant changes in Nigeria’s petroleum products market, driven largely by the increasing contribution of the Dangote Petroleum Refinery to domestic supply. Maher-Bonnett noted that the country’s self-sufficiency in refined petroleum products was improving as the Dangote refinery increased production. “Nigerian fuels demand is down this year,” the presentation stated, attributing the decline partly to higher pump prices. It also identified the Dangote refinery’s increasing output as a major factor reshaping regional petroleum products trade. “Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated. The development, according to the analysis, has reduced the attractiveness of importing some petroleum products from Europe into West Africa as locally refined supplies become more readily available. The presentation also observed that government intervention in the market had been limited, apart from an NNPC price reduction during the month under review. Beyond Nigeria, Maher-Bonnett highlighted Ghana’s growing refining capacity, noting that the 45,000-barrel-per-day Tema refinery was ramping up production and improving the country’s domestic supply position. He further pointed to weakening economics of petroleum products shipments from Europe to West Africa and Europe to the United States, with freight costs adding to the pressure on the traditional trading routes. For Nigeria, the projected entry of seven additional modular refineries could deepen domestic refining capacity, reduce dependence on imported petroleum products and create opportunities across the downstream petroleum value chain. However, the extent of their contribution will depend on whether the proposed facilities meet their projected commissioning schedules and secure reliable crude supply, financing and access to the domestic market. 📰 Get Latest News Updates Join our Telegram group and receive breaking and trending news updates directly on your phone.

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