News Power Production
March 23, 2021 No Comments

Dangote expects Lagos refinery to be completed by end of 2021

President, Dangote Group, Alhaji Aliko Dangote yesterday said the multi billion dollars and 650,000-barrel per day (bpd) integrated refinery and petrochemical project will be completed by the end of this year, just as granulated urea fertiliser plant at Ibeju Lekki corridor will begin production of fertiliser products next week.

This was even as the Lagos State Governor, Mr Babajide Sanwo-Olu promised to support the ongoing multi-bilion dollars investments on the axis with massive road infrastructure to further open up the economy of the axis and create a more conducive environment for the industries springing up in the area.

The duo spoke with journalists during Governor Sanwo- Olu’s two-day working visit to the Lagos Free Zone, saying that the investments would turn around the state and the nation’s economy.

Speaking on the economic potential of the refinery, Dangote also added that though the Africa’s biggest oil refinery and the world’s biggest single-train facility expected to generate about 230,000 indirect jobs would be completed by the end of this year, production of petroleum products would commence by first quarter of 2022.

The Africa’s richest man disclosed this while fielding questions from journalists after the tour of the project by the Lagos State Governor, Mr. Babajide Sanwo-Olu who went on a two – day working visit with members of his cabinet to the burgeoning industrial hub located in Lekki area of the state. He also stated that the granulated urea fertiliser plant at Ibeju Lekki corridor will commence production of fertiliser products next week.

He said: “OK the fertilizer you will actually see fertilizer within the next one week. The refinery will be finished by the end of this year and product will start coming out by first quarter of next year. ”

He commended the governor for finding time out to visit the refinery during his working visit, saying: “First of all let me thank His Excellency for taking off about five hours to be with us today.

The governor has been around this area for the past two days. Really Mr. Governor we are very grateful for your support for making this place to be investors friendly and all the support you have been giving. Not only to Dangote but to almost everybody and I can assure that this place will be the hub of industrialisation in the country going forward.

On his part, Governor Sanwo-Olu said there is urgent need to assess the level of investment on the Lekki Corridor, saying efforts were being made to address the issues the investors are facing and avert haphazard development in the new Industrial hub informed the working visit.

Sanwo-Olu said the development of Lekki Port being propelled by the operators and owners of Lagos Free zone has gone up to about 60 per cent , saying the state government would ensure that the problems being experienced in Apapa port.

To regulate and guide against haphazard development, Governor Sanwo-Olu said agencies of government would be located in the axis to ensure that the right things are done.

“The ministry of Environment, Physical Planning, Waterfront and Tourism would also have a full presence here.

Physical planning are things we cannot afford to miss out. We need to ensure that the master plan of this area is kept and the new ones we need to look at we will certainly pick them up for approvals that is required so that government can indeed take the position,” he said.

Production
January 29, 2021 No Comments

NNPC records 92% increase in sales of petroleum products in October

The Nigerian National Petroleum Corporation (NNPC) has announced that its downstream subsidiary, the Petroleum Products Marketing Company (PPMC), recorded a total of ₦158.04 billion from the sales of white products in the month of October 2020.

The Corporation disclosed this on its October Monthly and Financial Operation Report (MFOR) in Abuja, on Thursday.

It said the amount represented 92 per cent increase over the ₦80.15 billion sales in September 2020.

The report indicated that total revenues generated from the sales of white products for the period October 2019 to October 2020 stood at ₦1.95 trillion, with Premium Motor Spirit (PMS) accounting for about 99.07 per cent of the total sales with a value of over ₦1. 9trillion.

In terms of volume, the October 2020 sales figure translates to a total of 1.224.54 billion litres of white products sold and distributed by PPMC within the period compared with 603.39 million litres in the month of September 2020.

This, it said, comprised 1.224.20 billion litres of PMS, 0.31 million litres of Automotive Gas Oil (AGO) also known as diesel and 0.033 million litres of Dual Purpose Kerosene (DPK).

“Total sales of white products for the period October 2019 to October 2020 stood at 16.462.50 billion litres and PMS accounted for 16.344.36 billion litres or 99.28 per cent,’’ it said.

On pipeline vandalism, it noted that 23 pipeline points were vandalised in the month under review, representing about 10 per cent increase from the 21 points recorded in September 2020.

“ Of this figure, Mosimi area accounted for 83% of the vandalised points, while Port Harcourt Area accounted for the remaining 17 per cent,’’ it said.

In the Gas Sector, the report revealed that a total of 214.07 billion Cubic Feet (bcf) of natural gas was produced in the month October 2020, translating to an average daily production of 6,908.34 Million Standard Cubic Feet per Day (mmscfd).

It noted that the daily average natural gas supply to power plants increased by 8.60 per cent  to 745mmscfd, equivalent to power generation of 2,801 Megawatts.

“For the period of October 2019 to October 2020, a total of 3,018 BCF of gas was produced, representing an average daily production of 7,658.88 mmscfd during the period,’’ it said .

The MFOR also indicates that period-to-date gas production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and NPDC contributed about 68.18 per cent , 20.12 per cent  and 11.70 per cent respectively to the total national gas production.

It adds that in terms of natural gas off take, commercialisation and utilisation, out of the 208.96 BCF of gas supplied in October 2020, a total of 118.40 BCF of gas was commercialised, consisting of 38.07 BCF and 88.90 BCF for the domestic and export market respectively.

This, it said, translated to a total supply of 1,269.03mmscfd of gas to the domestic market and 2,870.57mmscfd of gas supplied to the export market for the month.

Source: Business Insight News

Power Production
December 17, 2020 No Comments

Nigeria resumes petrol import from China

Nigeria, Africa’s biggest oil producer and exporter, has resumed the importation of petrol from China, the world’s top crude oil importer.

The Asian country shipped 37,000 metric tonnes of petrol to Nigeria in September for the first time since July 2019, data from the General Administration of Customs showed, according to S&P Global Platts.

China, a major exporter of transportation fuels, has extended exports to Africa in recent years.

The first African country to receive Chinese petrol was Togo in April 2018 at 50,000 mt, followed by Nigeria in January 2019 at 51,000 mt, historical GAC data showed.

The most recent diesel exports from China to Africa were in June, with Kenya and South Africa receiving 40,000 mt and 35,000 mt, respectively, according to the data.

China’s annual crude oil imports increased by 0.9 million barrels per day in 2019 to an average of 10.1 million bpd, according to the United States Energy Information Administration.

The EIA said China’s new refinery capacity and strategic inventory stockpiling, combined with flat domestic oil production, were the major factors contributing to the increase in its crude oil imports in 2019.

Last year, China’s refinery capacity increased by 1.0 million bpd, primarily because two new refining and petrochemical complexes came online with capacities of 0.4 million bpd each.

As a result, the country’s refinery processing also increased to an all-time high in 2019, averaging 13.0 million bpd for the year, according to the EIA.

Nigeria has continued to rely heavily on importation for many years to meet its fuel needs as the nation’s refineries remain in a state of disrepair.

Uneven demand recovery in Africa has led to a divergence in support for Asian transportation fuel markets as diesel and jet fuel requirements weaken while demand for petrol remains robust, industry sources said.

The slowdown in Africa’s diesel and jet fuel demand, in particular, has removed a significant pillar of support from Asian middle distillate markets after buoying them for most of the third quarter, the sources said.

The African continent draws most of its petrol and middle distillate imports from the Persian Gulf and the Mediterranean, and an increase in demand typically lends indirect support to Asia, market sources said.

Source: Punch

Industry Production
December 17, 2020 No Comments

Nigeria’s daily oil production falls to 1.32 million barrels

Crude oil production in Nigeria extended its decline to 1.32 million barrels per day in November on the back of the cut deal by the Organisation of the Petroleum Exporting Countries and its allies.

The latest data obtained from OPEC on Wednesday showed that Nigeria’s oil output dropped from 1.34 million bpd in October, based on direct communication.

According to secondary sources, total OPEC crude oil production averaged 25.11 million bpd in November, up by 0.71 million bpd in October.

“Crude oil output increased mainly in Libya and UAE, while production decreased primarily in Iraq,” the group said in its Monthly Oil Report for November.

OPEC and its allies, known as OPEC+, agreed in April to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.

They decided to cut supply by a record 9.7 million bpd for May and June but the deal was extended in July by one month.

Members that did not implement 100 per cent of their production cuts in May and June, including Nigeria, were asked to make extra reductions from July to September to compensate for their failing.

The OPEC+ cuts of 9.7 million bpd were later scaled back to 7.7 million bpd from August through the end of the year.

Earlier this month, OPEC+ agreed to gradually increase their oil production by 500,000 bpd in January. The group also agreed to hold monthly meetings started from January to decide on further production adjustment until the total production increase reaches two million bpd.

They also agreed to extend the compensation period until the end of March 2021 to ensure full compensation of overproduction from all participating countries.

Source: Punch

Industry Production
November 10, 2020 No Comments

NNPC to commence oil explorations in Lake Chad Basin

The Nigerian National Petroleum Corporation (NNPC), is set to commence oil exploration in the Lake Chad Basin of Borno State.

According to NNPC, the commencement was facilitated with the restoration of relative peace in the basin by Nigerian Army.

Minister of State for Petroleum Resources, Timiprye Sylva, disclosed this, after meeting with the Chief of Army Staff, Lt-Gen. Tukur Buratai, and Commander of Multinational Joint Task Force (MNJTF), Major-Gen. Ibrahim Yusuf, at Maimalari Cantonment, Maiduguri.

“The NNPC has seen a lot of prospects in the Chad Basin to commence exploration and drilling activities. That is why the Corporation is collaborating with the Army to resume oil exploration.”

He said the collaboration will ensure that security is being provided for oil exploration and drilling activities to commence very soon in the Basin.

While commending the Army restore peace, Sylva said: “The Army has done a great job. They continue to perform in the Northeast. We wanted to commence exploration and drilling activities there because we believe that the relative peace in this area is enough for us to continue drilling activities in the northeast.

“As you may well know, we have found oil in Gombe State, and we believe that there is a lot of oil to be found in Chad Basin.”

Power Production
November 10, 2020 No Comments

Improved power supply will lift Nigerians out of poverty – Elumelu

The Chairman of Transcorp and Founder of the Tony Elumelu Foundation (TEF), Mr. Tony Elumelu, has stressed that improving access to electricity remains the single most critical factor for lifting a lot of Nigerians out of poverty and job creation for the teeming youth.

He said this during the announcement of Transcorp Consortium’s 100 per cent acquisition of the 966MW installed capacity Afam Power Plc and Afam Three Fast Power Limited, at an acquisition cost of N105.3 billion.
According to Elumelu, who is also the Chairman of the United Bank for Africa Group, bringing affordable, dependable power to the Nigerian people is core to Transcorp’s mission.

“Our significant investments in the power sector are demonstrations of our contribution to the economic transformation that I know Nigeria is capable of. Power remains the single most critical factor for lifting our people out of poverty and job creation for our teaming youth.

“The acquisition marks a significant milestone for Transcorp in the pursuit of its corporate purpose of improving lives and transforming Nigeria. I am honoured to be working with the federal government and urge it to continue its policy of creating an enabling environment, which sustains the confidence of both local and foreign investors – and delivers the opportunities and aspirations that all Nigerians seek.”

Speaking at the event, Vice President, Prof. Yemi Osinbajo, said: “Today marks a milestone for the country with a return to private sector investment in the power sector.

“This investment by Transcorp in acquiring ‘Afam Power Plc’ and ‘Afam Three Fast Power’ is the first of many new investments planned in the sector across the value chain. We expect that under Transcorp’s ownership the operational capacity of the facility will be raised to its full capacity.”

Speaking on Transcorp’s track record, the Director-General of the BPE, Mr. Alex Okoh said “Transcorp Consortium is one of the success stories of Nigeria’s Privatisation Programme. Through its investments in Transcorp Hotels Plc and Transcorp Ughelli Power Limited, the consortium has consistently achieved its performance targets as contained in the respective post-acquisition plans.”

Source: This day

Manufacturing Production
October 20, 2020 No Comments

Seplat looking to award key engineering contract for its Sapele field

Nigerian independent Seplat Petroleum has released details of a front-end engineering and design (FEED) contract it plans to award for oil capacity expansion work at its Sapele field according to Upstream.

A  recent tender noted that as part of the Sapele Further Oil Development (FOD) campaign, Seplat on behalf of the joint venture of itself and the Nigerian Petroleum Development Company Limited (NPDC) has deemed it necessary to carry out the FEED of the Integrated Liquid Treatment Facility and Flowstation at its Sapele Field to handle the anticipated increase in production from OML 41.

To execute this FEED scope, it is mandatory that a competent engineering contractor with proven experience in Liquid Treatment Facility (LTF), Produced Water Treatment (PWT), and Sand Management Systems (SMS) Engineering Design in line with SEPLAT’s Produced Water Management strategy is engaged.

The successful contractor shall demonstrate capability in the engineering of PWT and SMS, and by leveraging its experience in conjunction with a reputable Original Equipment Manufacturer (OEM) to provide a detailed technical proposal for PWT and SMS to be deployed as part of the Sapele FOD Liquid Treatment Facility Project. The tendering process shall be run on the Nigerian Petroleum Exchange (NipeX) contracting platform.

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Manufacturing Production
October 20, 2020 No Comments

Nigeria’s natural gas base price inches up in new PIB

The domestic base price, the price at which Nigerian gas producers are to sell to Power Plants, will be $3.2 per Million British Thermal Units (MMBtu), beginning from January 1, 2021, if the Petroleum Industry Bill (PIB) is passed into law in its current form.

But the price at which the gas-based industry, comprising companies which produce methanol, fertilizer (urea, ammonia), polypropylene, etc., will purchase natural gas, can be as low as $1.5 per MMbtu, the incoming law says. That price is special and it is calculated from a formula.

Gas users outside the power sector and the gas-based industry will pay at least $0.5 higher than $3.2 per MMbtu, and their cost of purchase will depend on negotiations with their suppliers.

The domestic base price -$3.2per MMBtu- which is specified in the third schedule of the bill, currently being debated at the Nigerian National Assembly, shall be increased every year by $ 0.05 per MMBtu until 2037, when a price of $ 4.00 per MMBtu will apply for that year and future years.

The Midstream and Downstream Regulatory Authority, “may, by regulations, change the domestic base price and the yearly increase) to reflect changed market conditions and supply frameworks”, says the bill, submitted two weeks ago by President Muhammadu Buhari.

“The objective is to establish a fully functioning free market in natural gas for domestic supplies. This is to be achieved through the voluntary supplies. Where insufficient voluntary supplies are occurring, the Authority may increase the domestic base price and, or the yearly increases. At the same time, the Authority shall monitor the gas prices in other major emerging countries and ensure that Nigeria continuous to have a price level for natural gas that is less than the average of these emerging countries in order to promote the non-oil sectors in the Nigerian economy”.

Timipre Sylva, Minister of State for Petroleum, had given hint of the gas pricing framework last August during a conversation with the Nigeran Association of Petroleum Exlorationists (NAPE). The bill, he explained, “will establish a gas base price that is higher than current levels (The current domestic base price is $2.5 er MMbtu) for producers and this base price will increase over time”.

Sylva said: “This price level should be sufficiently attractive to increase gas production significantly since this gas price will be comparable with gas prices in other emerging economies with considerable gas production.

“The price will be independent of all gas prices for LNG export and is therefore a stable basis for enhanced domestic gas development, regardless of international oil or energy development”.

 

Source: Africa Oil + Gas Report

Industry Production
October 20, 2020 No Comments

Shell prepares gas plant to power booming Aba commercial hub

Shell Nigeria Gas (SNG) has commenced City Gate Gas Plant, a project to ensure safe transmission of gas to power booming businesses in Aba, Abia state’s commerce hub.

Ed Ubong, Managing Director of SNG, a Shell company in Nigeria, said, “City Gate Plant will enable SNG remove more impurities from natural gas, odorise the gas to increase quality to end users. “The project is the solution to the challenge businesses in the region face with frequent incursion of liquid into the gas pipelines. It therefore aims to provide customers top quality gas at reduced cost.”

Aba City Gate Plant is a facility of 10 million standard cubit feet of gas per day (mmscfd) allowing to 30mmscfd equivalent with 40 megawatts (MW) gas-to-power electricity generation capacity, further expandable to 120MW.

SNG is first in Nigeria to introduce the technical solution for reinjection of Compressed Natural Gas (CNG) through its pipeline network, enabling injection of odours into natural gas to ease detection in case of leak.

Aba City Gate plant complements SNG’s recently completed 20km domestic gas pipeline expansion project in Abia, connecting Agbor Hill, Osisioma and Ariaria industrial zones.

The expansion project has enabled supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to popular Ariaria market in Abia State.

 

Source: Vanguard

Industry Production
April 21, 2020 No Comments

What does this mean for oil-producing countries like Nigeria?

What does this mean for oil-producing countries like Nigeria?

Oil producing countries have different benchmarks their commodity is valued against. Nigeria crude oil, for instance, is benchmarked against the Brent Crude which as at 11:41 pm on Monday is valued at $25.57 while the West Texas Intermediate, although still negative, has slightly appreciated to $-16.20.

The Brent Crude is considered the international benchmark. Other benchmarks include but not limited to Mexican Basket (currently trading at $14.35), Indian Basket (currently trading at $20.56) and Dubai (currently trading at $28.11).

What does the negative value mean?

The current negative valuation of the WTI is for the May delivery. June delivery is trading at a still low of $22 a barrel.

Sellers of the May contract have just one more day to find buyers, but with storage in short supply, they are struggling to find takers.

The negative valuation therefore simply implies sellers are paying others to take the commodity.

Why would oil sellers pay others to take the commodity?

In the oil market, the law of supply and demand is subtle. The price of oil is set in oil futures market. This means buyer signs a contract to buy barrels at a specified amount at a particular date in the future. Under a futures contract, buyers and sellers are expected to go through the deal as implied at the specified date.

A seller might have lots of contracts and lesser space. So, will need to offload the present commodities to accommodate future commodities.

Does it mean Nigeria’s crude oil is worthless?

No. Nigeria oil is not worthless and it is currently not trading at the negative. The current worth is $25.57 a barrel.

However, since the nation’s 2020 budget was predicated at $53 per barrel of crude oil, this may present economic problems. President Muhammadu Buhari has however constituted a committee to revisit the budget since the emergence of the drop in oil prices.

What is the cause of the fall in price?

The decline in oil prices has been persistent for a while. According to the US Energy Information Administration (EIA), Crude oil prices were generally lower in 2019 than in 2018.

However, the coronavirus disease (COVID-19) outbreak made things worse in 2020. Companies can no longer produce in full capacity and thus lower demand for the commodity (oil). And oil-producing countries are still producing massively, making the market overflooded.

Any hope for the future?

Yes. If the coronavirus disease can be completely curbed, there will surely be an improvement in the oil prices since companies’ production will return to normal; invariably demand is expected to be more than present.

What can world leaders do?

There is a need for concerned parties to agree on a way forward. It is important that all nations control their production to stabilise the market.

In the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting held via videoconference, on Sunday, April 12, 2020, it agreed to, “Adjust downwards their overall crude oil production by 9.7 mb/d, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020.

“For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 7.7 mb/d.”

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