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Energy

FG discloses when Nigeria will start exporting petroleum products

DPR announced that the importation of petroleum products would reverse when the new refineries resume.

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FG directs 9,000 filling stations to install gas facilities, FG discloses when Nigeria will start exporting petroleum products, DPR closes seven gas firms in Lagos, plans to close more

The Federal Government has disclosed that Nigeria will be a net exporter of petroleum products by 2022 with the five built refineries across the country and the 7 refineries that are currently under construction.

The disclosure was made by the Director and Chief Executive Officer of the Department of Petroleum Resources (DPR), Sarki Auwalu, in Lagos, during a working visit by the Minister of Information and Culture, Alhaji Lai Mohammed, to their headquarters.

READ: Minister highlights why Petroleum Industry Bill needs to be passed by mid-2020

Auwalu gave assurances that the importation of petroleum products would reverse when the new refineries come on stream within the next 2 years.

He said that this would be achieved through the combined capacity of 375,000 barrels per day from 27 modular refineries, 650,000 barrels from the Dangote refinery, and the 450,000 barrels from the government-owned refineries after their rehabilitation.

READ: FG’s plan for N350 billion revenue from oil field licensing suffers setback

According to the News Agency of Nigeria (NAN), Auwalu specifically said that the Dangote refinery and petrochemical project with a capacity of 650,000 barrel per day, which is the biggest in Africa, Waltersmith refinery with 7,000 capacity per day, and others that are at the completion stage, would soon come on stream.

He also disclosed that the existing 5 refineries included the 4 plants owned by the Federal Government through the Nigerian National Petroleum Corporation (NNPC) and the one owned and operated by Niger Delta Petroleum Resources.

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READ: Dangote Refinery to save Nigeria $10 billion in forex

Going further, the DPR boss stated that the agency hoped to grow its oil reserve to 40 billion barrels and gas to 210 trillion cubic feet, in addition to growing oil production from the current level of 2.4 million capacity to 3 million production capacity and reduced cost of production.

In his response, Lai Mohammed commended the management of DPR for the measures which were implemented to prevent the coronavirus pandemic from crippling the nation’s economy.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Columnists

Why the proposed Borno power plant may not materialise 

The glaring security challenge cannot be overlooked in considering a major power plant project in Borno State.

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Only a few days ago, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, led a delegation to Borno State to meet with the Governor of the State, Babagana Zulum.

In the conversation with Zulum, Kyari promised the establishment of a gas-fired power plant in Borno State within a maximum of 4 months to solve the recent blackouts that resulted from insurgents cutting off Borno from the national grid since January this year.

In Kyari’s words, “We have talked to each other and we think it’s very possible to establish a dedicated power plant in Maiduguri which will serve current needs of power supply not only in Maiduguri but to other parts of the neighbouring cities.”

Yet, there is a significant possibility that the power plant promised by Kyari may not materialize for many reasons, the first of which is security. In the meeting with Kyari, Governor Zulum had noted: “The ongoing insurgency has cut off the entire Borno from the national grid in the last three months. We put all our efforts and restored it back… but unfortunately, after 48 hours, the same group of insurgents went back and destroyed the main tower again.”

This glaring security challenge cannot be overlooked in considering a major power plant project in Borno State, particularly noting that the State and its surrounding communities have been the hot zone of insurgent and terrorist attacks by Boko Haram insurgents since 2009. Borno, Yobe and Adamawa have particularly been states where the insurgents have set up shop and carried out various activities, including kidnap, extermination of entire communities, burning of markets and religious buildings and the attack on the United Nations compound, in each case claiming tens or hundreds of innocent lives.

One report reveals that at least 37, 500 people have been killed by the insurgent group since May 2011, a modest number, some say. Also, till date, some of the secondary school girls kidnapped in the April 2014 Chibok incident are yet to be returned to their families. It is then bewildering how Kyari intends to see to the construction and operationalizing of this gas power plant.

Additionally, while the Minister of Petroleum for State, Chief Timipre Sylva, announced last year about the discovery of oil and gas deposits in the North, we have not seen any exploration and production kick-off. It then begs the question of where the gas for the Borno power plant intends to be sourced. The only gas pipeline that runs through the North – the AKK- is still in its first phase of construction out of three phases and has been earmarked at the earliest, to be completed in 2023 – not counting the typical delays the project will experience along the way.

Should the AKK by some stroke of luck materialize much earlier than the target date, the pipeline route is a considerable distance from Borno. It runs the route of Ajaokuta-Abuja-Katsina-Kano, its endpoint, a striking 481km from Borno State. Thus, there would have to be construction of a tie-in pipeline almost as long as the AKK from Kano to Borno State to get gas to Borno.

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Optimists may reference the oil and gas discovery in the North and how production may start soon, thus obliterating the need for a 481km pipeline. This optimism however is not well-founded, as insecurity has been shown to be a major risk to oil and gas projects everywhere in the world. One of the major reasons the Trans-Saharan Gas Pipeline proposed to run from Nigeria to Algeria was abandoned was due to security challenges posed by Nigeria’s Movement for the Emancipation of the Niger Delta (MEND), the Tuareg guerilla movement in Niger and other insurgent groups along the proposed route of the pipeline.

These increased the risks across board, including for completion and operations through the lifecycle of the project. As such, failing to fix the security threats in northeast Nigeria makes any proposed gas plant project a pipe dream. Transporting gas via LNG trucks is not a better option, given that the drivers and their cargoes would be in danger of being kidnapped, shot at or bombed. The risks for both personnel and investors are high.

In any event, promising a power plant in 4 months for the people of Borno is unconscionable, since a typical gas power plant will take between 1 to 6 years to construct in relatively peaceful regions. What the government needs to do instead of making promises it cannot keep is to work arduously to fix the security challenges in Northern Nigeria and at the same time consider using decentralised solar power to provide power supply to homes, government institutions, schools and businesses while plans to produce gas in the region or transport gas to it are underway.

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Business News

FG to open LPG distribution channels in all local governments

The project is targeted at reaching 99 million women and households within three years cutting across 774 LGAs in the federation.

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Nigeria's Natural Gas Liquids

The Federal Government disclosed that it is planning to launch Liquefied Petroleum Gas distribution channels in every local government in Nigeria.

This was disclosed by the Minister of State for Petroleum,  Timipre Sylva, at the inauguration of the Nigerian Women for Liquefied Petroleum Gas (LPG) Project, organised by the National Centre for Women Development (NCWD), Zigma Gas Limited and the Federal Ministry of Petroleum Resources on Friday in Abuja.

READ: LPG: Nigerians paid more to refill 12.5kg gas cylinders in January 2021

What the minister said

“The ministry is targeting to ameliorate the energy challenge in Nigeria and clean cooking gas is key in this regard because 70% of greenhouse emissions are caused by deforestation.

“This LPG project will enable us to empower rural women to use a more cleaner energy source for cooking.”

Mrs Mary Ekpere-Eta, DG NWCD added that the scheme would benefit Nigerian women and youths as it will support the efforts of the Federal Government in achieving its 2023 sustainable energy targets.

READ: World’s biggest oil company, Saudi Aramco pays a whopping $75 billion in dividend

“The project is targeted at reaching 99 million women and households within three years cutting across the 120,000 polling units and all wards in the 774 LGAs in the federation.

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“The first phase of this project will be targeting 11 states – Katsina, Sokoto, FCT, Ebonyi, Plateau, Adamawa, Borno, Bayelsa, Cross River, Imo and Ogun,’’ she said.

READ: NNPC expects $8.7 billion investments from refineries, pipeline rehabilitation

What you should know 

The FG has launched other policies aimed at maximising Nigeria’s internal gas usage, Nairametrics reported in February that the FG plans to convert one million cars to gas at no cost, in its autogas initiative.

 

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