Dangote to Welcome Another Rival as FG Announces Completion Status of Another Refinery

• The Nigerian Midstream and Downstream Petroleum Regulatory Authority said the Kaduna Refinery project is 81.1% finished
• The Authority's chief executive office underlined that safeguarding Nigeria's economy is the goal of the refinery's development
• The refinery's refurbishment aligns with the NMDPRA's strategic goal of increasing domestic refining capacity

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

The Kaduna Refinery project is 81.1% complete, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Farouk Ahmed, the Authority's chief executive officer, gave this information during a recent event on Tuesday. April 15th, News Central reported.

Ahmed emphasized that the upgrade of the refinery aims to protect Nigeria's economy from the fluctuations in global crude oil prices in addition to lessening the country's reliance on imported fuel.

“Kaduna Refinery’s overall progress is 81.1% and we have broken it down into work packages. One thing that is peculiar about Kaduna Refinery is that even if the refinery reaches 100% completion, we also have to consider the state of the pipeline. So, obviously, that is another major project,” he stated.

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The NMDPRA's strategic objective of enhancing domestic refining capacity is in line with the refinery's renovation, the CEO emphasized. For the nation to achieve long-term energy security and sustainability, this action crucial.

Ahmed reaffirmed that the Authority will continue to promote large-scale and modular refinery projects throughout Nigeria, including those that are privately owned.

Along with the refineries in Warri and Port Harcourt, the Kaduna Refinery is one of several significant projects among the several national assets undergoing restoration. Ahmed also mentioned initiatives from the private sector, such the Dangote Refinery, which has started increasing its capacity for production.

The head of the NMDPRA also emphasized the wider economic advantages of expanding domestic refining in his remarks. Nigeria can protect itself from changes in the world oil price caused by foreign policies and geopolitical events, especially those of powerful countries like the United States, by lowering its dependency on imported petroleum products.

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He clarified that although consumers may benefit from lower global crude prices, the government's revenue is also impacted because of the nation's reliance on oil exports. “With 1.4 million barrels per day, price drops lead to revenue losses,” he noted.

Ahmed also discussed the wider regulatory control that NMDPRA oversees, which includes the country's distribution infrastructure, petrochemical and gas facilities, modular refining plants, and crude oil refineries.

Due to a combination of structural and operational problems, only 57.8% of Nigeria's ten authorized refineries, which have a combined capacity of 1.2 million barrels per day, are currently active.

The rehabilitation of the Kaduna Refinery was first announced in 2023 by Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), who said that construction would start in the last quarter of 2024.

The Nigerian National Petroleum Company Limited (NNPC Ltd.) announced earlier this year that it was continuing to improve its refineries in Kaduna and Port Harcourt, which produce 150,000 barrels per day, in order to meet international performance standards.

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As the Kaduna plant edges closer to full reactivation, optimism is growing that its revival will not only meet domestic demand but also ease pressure on Nigeria’s foreign exchange reserves, often strained by fuel imports, thereby contributing to a more stable naira.

FG issues 47 refinery licences

Legit.ng reported that the Nigerian government has issued 47 Licences to Establish (LTE) and 30 Licences to Construct (LTC) refineries in 12 months.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) disclosed that the move is significant towards boosting Nigeria’s refining capacity and ensuring product availability.

The NMDPRA’s chief executive, Farouk Ahmed, stated this recently, saying that the 47 licences have a combined refining capacity of almost three million barrels daily.

Source: Legit.ng