Private investors’ll build more refineries in Nigeria – NNPC boss

The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, has said the deregulation of the downstream sector of the Nigerian oil and gas industry will encourage more private sector players to build refineries in the country.

Kyari said this on Tuesday at the African Refiners Association Week 2020 which held virtually, with the theme: ‘Towards cleaner fuels for cleaner air.” 

He advocated deeper collaboration among downstream players across the African continent to provide solutions to challenges of substandard fuels, according to a statement by the Group General Manager, Group Public Affairs Division, NNPC, Dr Kennie Obateru.

The NNPC boss said though the idea of price stabilisation, which led to the introduction of fuel subsidy in the 1970s, was noble, it had grown into a huge financial burden on the nation’s treasury over the years, necessitating its removal in March 2020.

He said the move would not only free up much-needed cash to fund infrastructural development, but would also eliminate market distortion, foster competition between operators, encourage more private sector players to build refineries in the country and promote efficiency across the entire value chain.

Kyari said increasing Africa’s refining capacity and quality of fuel required refineries to implement sustainable, coordinated pan-African solutions that would meet the target fuel specifications and thus protect the health and wellbeing of African nations and their citizenry.

“The future of our continent does not just lie in our ability to unlock value from our vast natural resources or powering an industrial and economic revolution, but also in our ability to implement proven refining solutions that consider the broader public health implications of our business decisions,” he said.

He said NNPC was making concerted efforts to carry out holistic rehabilitation of its refineries in Port Harcourt, Warri and Kaduna.

Kyari said the corporation was also collaborating with relevant stakeholders to establish modular and condensate refineries as well as supporting private sector establishment of refineries.

He said, “These projects will be in line with the AFRI standards of AFRI-4 specifications of 50 particles per million for diesel and 150 particles per million for gasoline by 2020, and AFRI-5 specification of 50 particles per million of sulphur in gasoline and diesel by 2030 respectively.

“Considering that revamp of petroleum products storage depots and associated pipelines is key to optimal operations of the refineries, the corporation has decided to use a Build, Operate and Transfer strategy to restore these facilities using private sector financing.”

According to him, this process has progressed significantly as the process of partner selection was ongoing to ensure sustainability of the refineries post rehabilitation.

Kyari said Nigeria was intensifying the use of natural gas to ensure lower emissions, adding that natural gas had been identified as the fuel of choice for the future “as it has the full credentials to support the achievement of the Sustainable Development Goals.”