Nigeria’s drive towards greater domestic petroleum products production is expected to receive a significant boost next year, with seven new modular refineries projected to begin operations, adding a combined capacity of 83,000 barrels per day (bpd) to the country’s refining industry.
The projection was disclosed by George Maher-Bonnett of Argus Media during a presentation at the OTL Africa Downstream conference in Lagos on Wednesday. He said the anticipated additions would significantly expand the contribution of modular refineries to Nigeria’s domestic fuel supply.
Presenting the company’s African Energy Outlook, Maher-Bonnett revealed that Nigeria had four operational modular refineries in September, with a combined installed capacity of 32,000 barrels per day.
“Four modular refineries operating in September, total 32,000 b/d capacity,” he said.
He further projected that seven additional facilities would come on stream next year, adding: “Seven new modular refineries to start next year” with a total capacity of 83,000 barrels per day.
The proposed expansion would more than double the existing capacity of Nigeria’s operational modular refineries, potentially strengthening local refining activities and reducing the country’s dependence on imported petroleum products.
However, the presentation did not disclose the identities of the proposed facilities, their promoters, locations, individual production capacities or expected commissioning dates.
The anticipated increase in modular refining capacity comes against the backdrop of growing domestic production, driven largely by the ramp-up of the Dangote Petroleum Refinery, and changing consumption patterns in Nigeria’s petroleum market.
Maher-Bonnett noted that the country had recorded a decline in fuel demand this year, attributing the development partly to higher prices.
“Nigerian fuels demand is down this year,” the presentation stated, citing “higher flat prices” as a contributing factor.
Despite the moderation in consumption, he observed that Nigeria’s capacity to meet domestic petroleum products demand was improving as the Dangote refinery increased production. He also projected a growing contribution from modular refineries in the country’s refining landscape.
The presentation further indicated that government intervention in the downstream petroleum market had been limited during the period under review, apart from a reduction in prices by the Nigerian National Petroleum Company Limited (NNPC).
“No government interventions, besides NNPC price cut this month,” it stated.
On the regional petroleum products market, Maher-Bonnett highlighted the growing influence of the Dangote Petroleum Refinery, describing its production performance as a major factor reshaping fuel supply and trade flows across West Africa.
“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.
The refinery’s increasing output is gradually changing the economics of petroleum products imports into the region, particularly supplies traditionally sourced from European markets. With more petrol available from domestic production, the commercial attractiveness of importing certain products from Europe into West Africa has weakened.
Ghana is also making progress in strengthening its domestic refining capacity, with the 45,000-barrel-per-day Tema refinery gradually increasing production.
According to Maher-Bonnett, the facility is ramping up operations, improving Ghana’s capacity to meet local petroleum products demand and reducing its reliance on imports.
The Argus presentation also pointed to weakening economics for petroleum products shipments from Europe to both West Africa and the United States. Rising freight costs have further undermined the competitiveness of these trading routes, reflecting broader adjustments in international petroleum products markets.
For Nigeria, the projected commissioning of seven additional modular refineries could further transform the downstream sector, particularly as the country seeks to maximise domestic refining capacity, improve supply security and establish itself as a stronger supplier of petroleum products within the West African market.
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