Nigerian refining projects leading Africa’s near-term capacity growth

Long-term refined products demand growth in West Africa has prompted many nations in the region to advance plans for expanding refining capacity through a series of newly commissioned and recently announced projects involving modernization of existing refineries as well as construction of new manufacturing sites.

This article examines West Africa’s recently completed capacity additions, grassroots projects under way, and rehabilitation programs still in development for aging refineries in the region.

Nigeria leads the way

At the forefront of growth in African crude processing capabilities, Nigeria will be responsible for most fresh capacity scheduled to come online in the continent during the next several years.

Nigerian conglomerate Dangote Industries Ltd. (Dangote Group) subsidiary Dangote Oil Refining Co.’s (DORC) nearly completed megarefinery, smaller operators’ employment of modular refining plants, and state-owned Nigerian National Petroleum Co.’s refurbishment plans for its existing refineries have positioned Nigeria as the fastest to add new capacity.

DORC is proceeding with installation of key equipment at its long-planned 650,000-b/d grassroots integrated refining and petrochemical complex now under construction in southwestern Nigeria’s Lekki Free Trade Zone (OGJ Online, Nov. 6, 2019). In July, Sulzer Chemtech Ltd.—the sole supplier of column internals, packings, and trays for the project—completed redesign and supply of internals for each of the refinery’s columns, which contractors continue to install at the site (OGJ Online, July 7, 2020). Multiple rounds of design checks, engineering studies, and discussions with technology licensors allowed Sulzer to redesign internals for what was originally planned as a 500,000-b/d refinery to suit the revised capacity without expanding its equipment footprint (OGJ Online, Apr. 27, 2017).

Now scheduled to be completed by yearend 2022, Dangote’s $12-billion Lekki integrated complex—which will become the world’s largest single-train refinery upon commissioning—will include a 3.6-million tonne/year (tpy) polypropylene (PP) plant, a 3-million tpy urea plant, a 400-Mw power 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 Group (OGJ Online, Jan. 18, 2018).

The refinery—which will process $11-billion/year of Nigerian crude—will have various processing units containing more than 65 columns and requiring more than 15 static mixers (Fig. 1). In addition to its combined crude-vacuum distillation unit, the complex’s major processing installations will include a residue fluid catalytic cracker, mild hydrocracker, alkylation unit, naphtha hydrofining unit, as well as continuous catalytic reforming units for production of gasoline and diesel meeting Euro 5-quality standards and jet fuel adhering to international aviation specifications. The complex will be equipped to produce a combined 33 million tpy of petroleum products, including gasoline, diesel, kerosine, aviation fuel, and other petrochemicals. Once in operation, the complex will not only help Nigeria meet its own fuel demand and become self-sufficient, but will add Nigeria to the list of top global exporters of gasoline, diesel, aviation jet fuel, as well as other petrochemicals and petroleum-based products, such as PP.

Further capacity additions, while smaller, also continue to come online as part of the Nigerian government’s modular refinery initiative that seeks to bolster domestic capacity to help ensure the country becomes a net exporter of petroleum products by 2022, Nigeria’s Department of Petroleum Resources said on Sept. 1, 2020. Deployment of modular refineries is also part of the Nigerian federal government’s Refinery Roadmap introduced in 2018 to help meet local demand for petroleum products and eliminate imports (OGJ Online, Jan. 11, 2018).

As 2020 drew to a close, Waltersmith Petroman Oil Ltd. subsidiary Waltersmith Refining & Petrochemical Ltd. officially commissioned the first 5,000-b/d phase of its currently planned 50,000-b/d modular refinery at Ibigwe oil field, in the Ohaji Egbema Local Government Area, Imo State, Nigeria (OGJ Online, Nov. 25, 2020). Alongside the first-phase plant’s November startup, Waltersmith and the Nigerian Content Development & Monitoring Board (NCDMB)—which holds a 30% interest in the project—broke ground on the refinery’s next 45,000-b/d phase that will include construction of a 25,000-b/d modular refinery to be followed by a20,000-b/d expansion, superseding Waltersmith’s original plan to build only a 30,000-b/d refinery at Ibigwe (OGJ Online, July 9, 2018).

This first 5,000-b/d phase of the reimagined refinery project will process about 1.8 million bbl/year of crude and condensate to produce 271 million l./year of refined products (including diesel, naphtha, high-pour fuel oil, and kerosine). The finished plant will process more than 16 million bbl/year of crude and condensate (Fig. 2).

The new refinery initially will process Nigerian crude from 7,000-b/d Ibigwe onshore field in eastern Niger Delta, also operated by Waltersmith (OGJ Online, Mar. 4, 2020). Nigerian President Muhammadu Buhari also has directed DPR and other government agencies to provide Waltersmith all necessary support to ensure access to crude and condensate feedstock for timely delivery of the operator’s capacity expansion plans.

As of September 2020, Edo Refinery & Petrochemicals Co. Ltd. (ERPC)—fully owned by AIPCC Energy Ltd., a joint venture of African Infrastructure Partners LLC and Peiyang Chemical Equipment Co. Ltd. of China—was nearing completion on its previously announced two-train 6,000-b/sd modular refinery at Ologbo in Ikpoba Okha Local Government Area of Nigeria’s Edo state (OGJ Online, Jan. 11, 2018). As of Sept. 8, 2020, the refinery’s first phase—which includes 1,000-b/sd and 5,000-b/sd plants—was 99% completed and awaiting final approval from the federal government to proceed with startup, planned for October 2020, the Edo State government said in a release.

While a revised timeline for commissioning the presumably now-completed project remained unavailable by yearend 2020, the refinery, will initially process crude oil from Nigerian Petroleum Development Co.’s (NPDC) nearby Oil Mining Lease (OML) 111 in Oredo, Ologbo, into a product slate of about 55% diesel, 38% fuel oil, just under 10% naphtha, and a remainder of gas that will be used to power processing activities at the site, according to the state government.

AIPCC Energy also has undertaken plans to further expand ERPC’s processing capacity to 30,000 b/sd in the near future and up to 60,000 b/sd in the long term, the Edo government said in a Sept. 7, 2020 release. Timelines for the proposed expansions, however, have yet to be disclosed. According to the company’s website and local Nigerian media outlets, AIPCC Energy also is nearing completion of the first 30,000-b/sd phase of its Koko Refinery & Petrochemicals Co. Ltd.’s modular refinery in Koko, Delta State, which the operator proposes eventually expanding to 90,000-b/sd, as well as development of a 6,000-b/sd modular refinery in Umusadege, also in Delta State. Neither the Nigerian federal nor Delta State governments show any record of the operator’s Koko and Umusadege refining projects.

To support the federal government’s efforts for smaller-scale capacity additions, NCDMB also has partnered with other investors for construction of a 2,500-b/d modular refinery that will later be expanded to 10,000 b/d in Edo State, as well as a small hydroskimming refinery in Bayelsa State that will produce a full slate of petroleum products to serve immediate and nearby markets.

On July 3, 2020, NCDMB signed an investment agreement with Duport Midstream Co. Ltd. for development of Nigeria’s first energy park in Otien, Edo State, that—upon full expansion—will include a 10,000-b/d modular refinery, a 60-MMcfd gas processing plant, 10-MMcfd compressed natural gas (CNG) plant, refined product terminal, and 20-Mw embedded power plant, all of which are to be built over a 5-year period. The 2020 agreement with Duport Midstream follows NCDMB’s June 2019 acquisition of equity interest in Azikel Group subsidiary Azikel Petroleum Ltd.’s 12,000-b/d hydroskimming modular refinery currently under development in Obunagha-Gbarain, Yenagoa, Bayelsa State (OGJ Online, July 14, 2020).

In mid-2020, Azikel let a contract to McDermott International Ltd. to provide engineering and procurement (EP) services for the Bayelsa refinery following the service provider’s previous delivery of front-end engineering design (FEED) on the project. Azikel has completed extensive site-preparation works, including site reclamation and backfilling, as well as completion of roads, a perimeter wall, drainage, and security gates. Alongside construction of crude oil feedstock tanks, ongoing early works at the site include construction of administrative, maintenance, and terminal operator buildings. Construction also remains under way on a 656-ft pier with shoreline protection, which will be used for delivery of refinery modules and other equipment to the site.

Previously planned for startup in 2018, the modular refinery’s inside battery limits (ISBL) unit—a contract for delivery of which Azikel Petroleum previously awarded to Ventech Engineering LLC, Houston—will include units for production of high-quality variants of LPG, gasoline, kerosine, aviation fuel, diesel, and heavy fuel oil (OGJ Online, Jan. 3, 2017). To be built on modules mounted on skids and equipped with an unspecified reforming technology from Honeywell UOP LLC to produce reformate that will be blended to produce a premium motor spirit (PMS; gasoline) with an 89 research octane number clear (RONC), the modular refinery includes ISBL and outside battery limits (OSBL) areas. The ISBL will consist of the following processing units:

• Crude distillation unit with debutanizer.
• Naphtha hydrotreater.
• Naphtha splitter.
• Catalytic reformer.
• Diesel hydrotreater.
• Gasoline stabilizer.

Specifically, the ISBL unit will be equipped to produce:

• PMS; 8,866 b/sd.
• Automotive gas oil (AGO); 1,090 b/sd.
• Kerosine-jet fuel; 1,452 b/sd.
• Off gas, mixed LPG; 200 b/sd.

Located along a 192,000-sq m stretch of former swampland that has now been cleared, destumped, filled, and reclaimed with 2.7 million cu m of sand, the OSBL—which is surrounded by a 4,120-m concrete perimeter fence—will include:

• A mix of 32 crude and refined product storage tanks of various sizes with a combined storage capacity of 70,930 cu m.
• Multiple-station loading bay gantries.
• Utilities for both the ISBL and OSBL areas, including installations for instrument-plant air, raw water treatment, steam generation, cooling water, nitrogen, fire and gas, flare, wastewater treatment, and power generation.
• A 3.1-km internal road network.
• Maintenance, operational, and administrative buildings.
• A vapor recovery unit.
• A fire station.
• Other unidentified, ancillary installations.

Bounded by the River Nun on the south, Obunagha community on the north, the Nigerian National Integrated Power Project’s (NIPP) Gbarain power plant on the northwest, and the proposed Azikel power plant on the west, the refinery will receive Nigerian Bonny Light crude and condensate via pipeline directly from Royal Dutch Shell PLC’s Gbarian-Ubie Shell gas gathering operations at the site’s eastern boundary. The Bayelsa refinery is scheduled to be completed and enter operation by yearend 2021, NCDMB said.

To date, Nigeria’s Department of Petroleum Resources (DPR) has awarded licenses set to expire in 2022 for a total of 27 modular refineries with a combined capacity of 375,000 b/sd.

Larger-scale projects to expand Nigeria’s domestic refining capacity also are under way. In September 2020, privately held BUA Group, Lagos, let a contract to Axens Group of France to provide basic engineering, proprietary technology and equipment, catalysts, and adsorbents, as well as training and technical services, for the conglomerate’s recently proposed multibillion-dollar 200,000-b/d grassroots integrated refining and petrochemical plant in Nigeria’s state of Akwa Ibom (OGJ Online, Sept. 2, 2020). Scheduled to be completed in 2024, the RFCC-based complex will produce Euro-5 quality gasoline, diesel, and jet fuel, as well as propylene and PP for Nigeria’s domestic and regional markets to help reduce national dependence on imported fuels and petrochemicals. Confirmation of BUA Group’s project follows a Sept. 1, 2020, announcement from DPR that Nigeria will become a net exporter of petroleum products by 2022 amid planned refining capacity scheduled to come online during the next 2 years (OGJ Online, Dec. 19, 2019).

As part of the national capacity expansion initiative, NNPC is gradually progressing with its long-planned program to rehabilitate and optimize processing capacities at its four state-owned refineries that—with a combined capacity of 445,000 b/sd—include subsidiaries:

• Port Harcourt Refining Co. Ltd.’s (PHRC) Port Harcourt refining complex—which houses 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 (WRPC) 125,000-b/sd refinery in Delta State.
• Kaduna Refining & Petrochemical Co. Ltd.’s (KRPC) 110,000-b/sd refinery in Kaduna State (OGJ Online, Sept. 30, 2019; Dec. 21, 2016).

To accommodate the rehabilitation program—which began in January 2020 at PHRC following NNPC’s purposeful shutdown of refining activities at PHRC, WRPC, and KRPC due to the refineries’ inability to receive crude feedstock as a result of extensive damage to oil pipelines that feed them—NNPC began a more-extensive virtual bidding process on July 24, 2020, for work at PHRC and on Aug. 25, 2020, for revamps at WRPC and KRPC, according to a Sept. 13, 2020, release from NNPC and Oct. 31, 2020, report from Nigeria’s Infrastructure Concession Regulatory Commission.

Following first-phase completion of rehabilitation works at PHRC in early 2020 with participation from partners Eni SPA and Maire Tecnimont SPA, NNPC said on Dec. 1, 2020, that it will begin PHRC’s second, more-extensive modernization during first-quarter 2021, with refurbishments of WRPC and KRPC to follow (OGJ Online, Sept. 23, 2019). The modernization program aims to restore operation of all four refining sites to at least 90% of their nameplate capacity, Mallam Mele Kyari, NNPC’s managing director, said in a Sept. 13, 2020, release.

While Kyari in June 2020 admitted NNPC does not have the cash to subsidize the complete program—which, in 2021 alone, will require an investment of nearly 66.7 billion naira ($175 million)—he reiterated NNPC’s commitment to completing the program via ongoing investment from the private sector. As part of that plan, following scheduled completion of the entire rehabilitation program at the three remaining refineries in 2023, NNPC will relinquish control of the refining enterprises (OGJ Online, Apr. 14, 2020). Outside private partners will invest in and manage the plants on an operations and maintenance (O&M) basis, in which these shareholders would be free to decide the future of the refineries to ensure their long-term operation and secure partners’ return on investment.

NNPC separately is pursuing development of a proposed grassroots condensate refinery. In late 2019, the operator let a contract to KBR Inc. to deliver project management consultancy services and FEED on four proposed condensate refineries at the Western Forcados Area and Assah North Ohaji South (ANOH) Area of Delta and Imo States (OGJ Online, Dec. 19, 2019). In mid-June 2020, Kyari said the project would now involve a single 200,000-b/sd condensate refinery consisting of four individual 50,000-b/sd processing plants, all four of which are scheduled to be in operation by 2023, according to a release from the Nigerian Investment Promotion Commission.

Angola revives projects

Further south, fellow African major crude producer Angola also unveiled a series of plans to increase domestic refining capacity.

In late 2020, the Angolan government, through state-owned Sonangol EP and new partner Gemcorp Capital LLP, took final investment decision (FID) near yearend 2020 to proceed with construction of the country’s long-planned greenfield refinery on the Malembo plain, 30 km north of Cabinda, in the country’s province of Cabinda (OGJ Online, Nov. 16, 2020). Gemcorp (90%) and Sonangol (10%) will invest $220 million to build Phase 1 of the proposed refinery, which alongside a 30,000-b/d crude distillation unit, desalinator, kerosine treating unit, and auxiliary infrastructure, also will include construction of a conventional float anchoring system, pipelines, and a more than 1.2-million bbl storage terminal. The FID also covers a $700-million investment for construction of Phases 2 and 3, which will add another 30,000 b/d of crude processing capacity, as well as units for catalytic reforming, hydrotreating, and catalytic cracking that will transform the site into a full-conversion refinery.

With formal construction of the site—including land clearing and preparation—started in March 2020 and completed in August 2020, and long-lead items for the project ordered in November 2020, Phase 1 of the 60,000-b/d refinery is scheduled to enter operation first-quarter 2022, with Phases 2 and 3 to be completed second-quarter 2023 and second-quarter 2024, respectively.

As the first private investment of its kind in Angola, the project supports the Angolan government’s goals of increasing domestic crude processing capacity to help considerably reduce the country’s dependence on expensive imports of refined products, encourage increased foreign investment, and create employment opportunities for Angolans. The Gemcorp partnership for the Cabinda refinery follows Sonangol’s June 2019 agreement with the United Shine consortium for the project, which Sonangol terminated later in the year following a contractual breach by the consortium (OGJ Online, June 4, 2019).

Alongside the grassroots Cabinda refinery, Angola is advancing work on upgrading its existing 65,000-b/d refinery in Luanda, and developing grassroots refineries in Lobito, Benguela Province, and Soyo, Zaire Province. In its latest annual report, Sonangol said its previously announced project to increase gasoline production capacity via installation of two new processing units as well as other utilities and offsites remains under way at the Luanda refinery (OGJ Online, June 6, 2019).

The state-run company also confirmed development remains ongoing for its earlier announced project to build a new refinery in Lobito (OGJ Online, Dec. 3, 2013). Temporarily suspended in 2016, the project is under reassessment based on new technical and financial assumptions following completion of an updated economic and financial feasibility study in 2020. Following the revised feasibility study—which took into account the possibility of building the Lobito refinery in a single phase or in two phases, with a first-phase capacity of 100,000 b/d and a second-phase capacity of another 100,000-b/d, as well as inclusion of petrochemical production—Sonangol said it has selected its preferred configuration for the future refinery and will soon update FEED for the project, on which JGC Corp. of Japan plans to deliver EPC.

In his state-of-the-nation address delivered on Oct. 15, 2020, Angola’s President João Manuel Gonçlaves Lourenço said the country also has launched a tender for construction of a 100,000-b/d refinery in Soyo. While further details on the Soyo project were not disclosed, Lourenço did confirm the tender remains under way. Timelines for completion of the Luanda, Lobito, and Soyo refining projects, however, have yet to be revealed.

Other projects

Further north in the region, Conex Group JV Ltd.’s Conex Petroleum Group Inc. progressed with installation of subsidiary Conex Petroleum Refining Co.’s (CPRC) 10,000-b/d modular refinery at Conex Petroleum Service Inc.’s (CPS) existing petroleum storage terminal in Monrovia, Liberia (OGJ Online, Mar. 25, 2020). While VFuels LLC—the unit’s Houston-based manufacturer—conducted a factory acceptance test for the modular refinery in late-March 2020, the refinery remains under construction at the Port of Monrovia, with no definitive timeframe yet confirmed for official startup. Mid-December 2020 CPRC posts seeking candidates to fill jobs at the site said its growth strategy includes adding a reforming unit at the plant, as well as expanding crude processing capacity to 50,000 b/d.

Launched in April 2019, the modular refinery comes as part of second-phase development of Conex’s 55,000-tonne petroleum storage terminal, commissioned in 2016 at Monrovia. Alongside helping ensure job creation and sufficient petroleum product su supply for Liberia, the refinery aims to create additional revenue through royalties to partner Liberian Petroleum Refinery Co. (LPRC), taxes to the government, and community development projects, independent Liberian-owned Conex said. The modular refining project follows LPRC’s previous plan to build a 50,000-b/d refinery in Liberia, which currently relies exclusively on fuel imports from surrounding regions (OGJ Online, June 21, 2016).

In second-quarter 2020, Equatorial Guinea’s Ministry of Mines and Hydrocarbons (MMH) and strategic partner Marathon Oil Co. let a contract to VFuels to execute a feasibility study for construction of a modular crude oil refinery in Punta Europa, Malabo, on Bioko Island (OGJ Online, Apr. 24, 2020). As part of the study, VFuels will deliver engineering and design of the proposed 5,000-b/d refinery to supply finished products for consumption by Equatorial Guinea’s domestic market.

The proposed refining project follows MMH’s December 2019 order for dismantling of a methanol plant owned by Atlantic Methanol Production Co. LLC at the Punta Europa gas complex—owned by Marathon Oil (45%) as well as partners Noble Energy Inc. (45%) and Sociedad Nacional de Gas de GE SA (10%)—and its conversion into a modular crude oil refinery (OGJ Online, Dec. 19, 2019). MMH’s late-2019 order was followed by a January 2020 meeting between the government of Equatorial Guinea and Marathon executives, at which the parties agreed both to the refining project and an immediate start to feasibility studies related to converting methanol to fuel.

In late 2019, Brahms Oil Refineries Ltd. and Africa Finance Corp. (AFC) announced they will partner to codevelop Brahms’s refinery and storage project in Kamsar, Guinea, which will include a 12,000 b/d modular refinery (producing gasoil, kerosene, gasoline, and fuel oil), 76,000 cu m of crude oil storage, 114,200 cu m of refined products storage, and ancillary transportation infrastructure (OGJ Online, Dec. 5, 2019). The refinery will be able to meet about one-third of Guinea’s refined products demand, according to the companies. While the partners already have secured Societe de Raffinage Guineenne SA to build the refinery following SNC-Lavalin Group Inc.’s previous completion of FEED, Brahms and AFC have yet to confirm taking FID on the project, which was scheduled by yearend 2020.