Nigeria has moved closer to restarting fuel refining and production at home, potentially shutting a major drain of its foreign exchange that has nearly crippled the economy.
After years of relying on imports for most of the fuel, the government announced last month that the state-owned refinery in Port Harcourt would resume operations before March. The plant is one of four state-owned refineries that had not been operational for years, but which the government is trying to revive.
The plant will begin by processing 60,000 barrels per day (bpd) of oil, before ramping up to its full capacity of 210,000 bpd later this year.
On Friday, Shell Plc’s Nigeria unit said it resumed supply of crude oil from its Bonny export terminal to the refinery.
A total of 475,000 barrels of oil was delivered to the Port Harcourt refinery on January 18, Shell’s Bonny oil terminal manager Osita Nnajiofor said in an emailed statement on Friday, Reuters reported.
“Future supplies from Bonny oil and gas terminal would be guided by the demand for the product,” he said.
Shell spokesperson Bamidele Odugbesan told Reuters by phone that the oil deliveries to the refinery were made this week.
The state oil firm NNPC Ltd last month tendered for operators for the Port Harcourt refinery.
Dangote refinery set for first fuel
Meanwhile, the 650,000 barrel per day privately-owned Dangote refinery which began to receive crude oil as it began operations, is set to deliver its first fuel in the Nigerian market, top officials at refinery said.
The sources said the delivery will take place within weeks, according to Reuters.
The Nigerian National Petroleum Corporation (NNPC) Ltd is set to supply the plant with 4 million barrels in March, bringing the total supplies since December to 12 million barrels, or about 100,000 bpd, Reuters quoted a source as saying.
Also, Dangote is set to receive two cargoes of U.S. WTI crude from oil trader Trafigura.
What this means: The developments at the two refineries mean Nigeria has been exporting less oil in recent months and could soon import less gasoline and diesel for domestic needs from oil majors and trading houses – a multibillion dollar annual trade that has persisted for decades.
The $20 billion refinery, Africa’s largest, is producing and storing diesel, naphtha, jet fuel, and residual oil, one of the sources said. It is expected to turn Nigeria into a net exporter of fuel to other West African countries.
Dangote has said it will start by refining 350,000 bpd and aims to ramp up to full production later this year.
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