Here is the major reason, NNPC, which, few days ago, awarded $1.5 billion rehabilitation contract for Port Harcourt refinery, is all out to place over $3 billion investments on Dangote Refinery.
The Nigerian National Petroleum Corporation (NNPC) has said that it plans to acquire a 20% minority equity stake in Africa’s biggest oil refining facility, Dangote Refinery, Lagos.
Checks by Platforms Africa show that this plan will cost the corporation about $3 billion to purchase 20 per cemt stakea in the $15 billion Dangots Refinery.
The major reason for this ventures, the corporation said, is to help further ensure an undisrupted supply of petroleum products across the country when the transaction pulls through.
This disclosure was made by NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, while speaking at the end of a 2-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”
According to Thisday, Yakubu said discussions were already ongoing with the Dangote Group for the acquisition of the stake.
The full gist
Yakubu, at the virtual event, stated that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations with Dangote Refinery.
He said: “We have what we call the Greenfield refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
At the moment, we have Dangote Refinery, which is the 650,000 barrels per day capacity, plus a mini 80,000 tonnes per annum petrochemical plant.
“What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us.”
Yakubu also noted that the state oil giant is collaborating with African Refinery in Port Harcourt, a co-location facility, the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant and Azikel refineries on condensate production.
Yakubu stated that despite the global push for renewables, Nigeria has a local, domestic and regional market for hydrocarbons adding that Africa will continue to rely on fossil fuels at least in the next 20 years
He said the country would not just fold its arms and do nothing with its hydrocarbons just because the International Energy Agency (IEA) has predicted a net-zero emissions scenario by 2050.
He said, “Today when you are bringing products into Nigeria, they disappear to neighbouring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market.’’
What to know about the Dangote Refinery
Dangote refinery is a 650,000 barrels per day (BPD) integrated refinery and petrochemical project under construction in the Lekki Free Zone in Lagos, Nigeria.
It is owned by the Dangote Group and is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, upon completion.
The integrated refinery and petrochemical project which will meet 100% of Nigeria’s refined petroleum product requirement and even have a surplus for export when completed is expected to be completed in 2021 after some delays and will generate 9,500 direct and 25,000 indirect jobs.
Larest figures show that the facility would gulp approximately $15 billion.