Africa’s biggest oil producer could save about $5 billion in foreign exchange every year via increasing local capacity for refining, energy firm Waltersmith Group has said.
Waltersmith, whose 5,000 barrels per day (bpd) refinery launched on Tuesday, said in a statement that Nigeria’s daily oil consumption came to 300,000 barrels, whereas its output was 5.6 times bigger than that figure and had low refining capacity.
“Nigeria is forced to re-import 20 per cent of oil exported, thereby losing an average of $40-$60/barrel re-imported in the process.
“Consequently, up to $5bn can be saved annually by building domestic refining capacity. Similarly, the 270 billion cubic feet of gas flared annually can generate up to 10,000MW of power.”
The Nigerian government, which owns 30% stake in the new refinery, spends around $7 billion each year on fuel imports because its oil refining infrastructures, with a 445,000 daily production capacity, are ageing fast and their revamp has been constrained by lack of fund.
Abdulrazaq Isa, chair of the Waltersmith Group, disclosed that the final investment decision on the expansion phase, comprising 25,000 bpd and 20,000 bpd condensate and crude processing plants, would be reached next month. Construction is anticipated to span 24 months.
The venture will deliver 2.7 billion litres of petroleum products including gasoline and liquefied petroleum gas at full capacity.
“This represents 10 per cent of total refined products consumption in Nigeria and significant foreign exchange savings for the nation, as well as job creation for thousands of our people,” Isa said.
“A major enabler for lowering financing risks for the project is crude oil supply assurance. Whereas the phase-1 is relatively secured, we are still going through the motions to get the expansion phases to similar levels of comfort.
“As a matter of fact, we are faithfully progressing the next phases hoping that all residual challenges will somehow be resolved in a timely manner before completion and commissioning early 2023.”
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