Nigeria lets contract to establish four condensate refineries

Dec. 19, 2019
NNPC let a contract to KBR to provide project management consultancy services on front-end engineering design definition for grassroots condensate refineries at Western Forcados Area and Assah North Ohaji South Areas of Delta and Imo States, Nigera.

Nigerian National Petroleum Corp. (NNPC) has let a contract to KBR Inc. to provide project management consultancy (PMC) services on front-end engineering design (FEED) definition for grassroots condensate refineries at Western Forcados Area and Assah North Ohaji South (ANOH) Areas of Delta and Imo States, Nigera.

As part of the PMC contract for definition of FEED, KBR will act as co-consultant with NNPC subsidiary National Engineering and Technical Co. Ltd. to deliver technical consultancy services for four greenfield refineries in the ANOH and Western Forcados Areas, KBR said.

Scheduled to be completed over a 6-month period, KBR’s specific scope of work includes providing strategic advisory consulting on elimination of condensate from Nigerian oil export streams.

Well-aligned with KBR’s gas monetization and asset optimization strategies, the project’s main objective aims to establish the four refineries to upgrade gas condensate to refined fuel products to help reduce Nigeria’s dependence on costly imported fuels, according to the service provider.

Without disclosing either a value of the PMC contract or a starting date, KBR did confirm it will complete its scope of work on the project out of its Leatherhead, UK, office with support from offices in the Middle East and Houston.

This latest contract for Nigeria’s state-owned refining business follows NNPC’s 2018 announcement that it would establish two 100,000-b/d condensate refineries at Western Forcados Area and ANOH Areas (OGJ Online, Aug. 31, 2018).

While Mallam Mele Kyari, NNPC’s group managing director confirmed in November the country had revised the earlier plan to establish two 200,000-b/d condensate refineries to boost domestic refining capacity, details regarding capacities of the two newly proposed refineries have yet to be disclosed (OGJ Online, Nov. 6, 2019).

Broader plans

Despite the government of Nigeria’s recent public pledge in November to support Nigerian conglomerate Dangote Industries Ltd. subsidiary Dangote Oil Refining Co.’s 650,000-b/d long-planned, grassroots integrated refining and petrochemical complex now under construction in southwestern Nigeria’s Lekki Free Trade Zone, NNPC continues to pursue its own plans involving a series of projects to modernize and expand capacities of refineries operated by NNPC as part of a strategy to meet Nigeria’s domestic demand for refined products and reduce its reliance on foreign imports (OGJ Online, June 22, 2017).

In September, NNPC confirmed it is moving forward with the long-planned modernization of its state-run refineries in a program that will optimize processing capacities at the sites by 2022 (OGJ Online, Sept. 30, 2019).

The program for full rehabilitation of NNPC subsidiary Port Harcourt Refining Co. Ltd.’s Port Harcourt refining complex—which includes a 60,000-b/sd hydroskimming refinery and 150,000-b/sd full-conversion refinery—in Nigeria’s Rivers state, Warri Refining & Petrochemcial Co. Ltd.’s 125,000-b/sd refinery in Delta state, and Kaduna Refining & Petrochemical Co. Ltd.’s 110,000-b/sd refinery in Kaduna state will begin in January 2020, according to Kyari.

“[W]e will deliver this project by 2022. We will commence actual rehabilitation work in January. We will do everything possible between October and December to close out all necessary conditions for us to deliver on that project. I believe that with the support that we have from the shareholders—government of this country, the entire staff of this company, and the contractors—I believe it is doable, and we will deliver the project,” Kyari said.

Now scheduled to be completed by 2021, Dangote’s $12-billion Lekki integrated complex—which will become the world’s largest single-train refinery upon commissioning—will include a 650,000-b/d crude distillation unit, a 3.6 million-tonne/year polypropylene plant, a 3 million-tpy urea plant, and gas processing installations to accommodate 3 bcfd of natural gas that will be transported through 1,100 km of subsea pipeline to be built by Dangote (OGJ Online, Jan. 18, 2018; Nov. 9, 2017).

Once completed, the state-owned condensate refineries—coupled with 445,000-b/sd capacity of NNPC’s existing refineries scheduled to soon be modernized—will help transform Nigeria into a net exporter of petroleum products to help guarantee the country’s energy security, according to Kyari.

“Our objective is to make Nigeria a net exporter of petroleum products, and you can only achieve that by complementing each other, both the public and the private sector. We are going to do more, and we actually need more of these private sector refineries for Nigeria to become a net exporter of gasoline and other associated products,” Kyari said.