With increased global competition in the crude oil production space, and the need to find a solution to the rising subsidy payments, the Nigerian National Petroleum Corporation (NNPC), has said the country needs a refining capacity of about 1.52 million barrels per stream day (MBPSD), to meet its premium motor spirit (PMS) requirement by 2025.
While the capacity requirement includes NNPC's current nameplate capacity of 445,000 BPSD (WRPC, KRPC, and PHRC), and Dangote Refinery's 650,000 BPSD, there is a shortfall of 427,000 BPSD, equivalent of 20 million litres of PMS daily.
PMS, also known as petrol has the highest demand among the refined products, as most vehicles are run on the product, and according to the NNPC, the country's petroleum products demand is expected to grow from 13.2 million metric tonnes (MMT) in 2015, to 15.1MMT in 2020, and 17.3MMT by 2025.
Group Managing Director, NNPC, Dr. Maikanti Kachalla Baru, yesterday, noted that increasing global competition on Nigerian crude oil due to the rise of new production centres across the globe particularly in Africa, and Argentina, portends a new dimension for the Nigerian Oil and Gas Industry.
This would therefore require Nigeria to unlock new barrels as quickly as possible to stay relevant in the new emerging world, he said at the Society of Petroleum Engineers' Oloibiri Lecture Series and Energy Forum (OLEF) 2019.
To address the shortfalls in refining capacity, Baru said: "NNPC is adding 215,000 BPSD of refining capacity through private sector driven co-location at our existing facilities in Port Harcourt Refining Company (PHRC-100,000 BPSD), and Warri Refining and Petrochemicals Company (WRPC-115,000 BPSD) respectively.
"Additionally, NNPC through its new initiative of establishing Condensate Refineries with private sector participation is providing clusters for in- country refining capacity totalling about 250,000 BSPD, which closes the PMS supply-demand gap, and creates positive margins to the investors.
"For the upstream, we are committed to aggressive production growth, and our target is to achieve a reserve level of 40 billion barrels of crude oil, and producibility of four million barrels of crude oil per day by 2025."
To improve access to power supply and check gas flaring, Programme Manager, Nigerian Gas Flare Commercialisation Programme (NGFCP), Justice O. Derefaka, noted that if 65 per cent of the flared gas volume meets a minimum monetisation investment threshold, the NGFCP has the potential of attracting an overall investment of between $3 billion and $3.5 billion.
He added that the potential annual revenues/GDP impact will be at least $1 billion/annum, while the NGFCP has the potential of triggering 89 projects assuming an average project size of $40 MM.