The federal government has said that petrol production from the 210,000 barrels per day (bpd) Port Harcourt refinery and the 650,000 bpd Dangote refinery is expected to increase significantly by November, potentially impacting fuel balances across the country, Africa and in northwest Europe.
The office of the coordinating minister of the economy also indicated that the first petrol output from the Dangote refinery is anticipated by September.
According to industry sources cited by Argus, an energy and commodity intelligence provider, Dangote secured regulatory approval earlier this year to commence operations of its 247,000 bpd fluid catalytic cracker and 27,000 bpd alkylation units in April and May, respectively.
However, the company has delayed the start-up of these units to prioritise petrol sales within the domestic market, where government interventions through state-owned NNPC continue to influence fuel prices.
Sources reported that Port Harcourt refinery operations are on track to restart a 60,000 bpd section by 31 August, despite multiple delays since April.
The facility recently received 450,000 barrels of domestic Bonny Light crude in July, marking its second supply of feedstock after a previous delivery of 475,000 barrels earlier in the year.
Sources also told Argus that Nigeria’s downstream regulator approved the movement of the crude from storage to the refinery at the end of July.
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Nigerian National Petroleum Company (NNPC) trading subsidiary has also applied for permits to sell kerosene and diesel from Port Harcourt in the domestic market, as well as for permits to export naphtha and fuel oil, according to industry insiders.
In addition, the catalytic reformer and feed unit for the refinery’s 60,000 bpd section are expected to commence operations in early October to upgrade naphtha.
Italian engineering firm Maire Tecnimont, which was awarded a $1.5 billion contract in April 2021 to restore the Port Harcourt refinery to 90 percent of its nameplate capacity, reported in June that the project was 84.6 percent complete, with procurement at 99 percent, engineering at 98 percent, and construction at 73 percent.
To further support Dangote’s operations, the government announced that from 1 October, NNPC will begin selling crude oil to Dangote in naira.
Although NNPC has been supplying crude to the Dangote refinery since its start-up in December 2023, payments have so far been made in US dollars. This new program is expected to address Dangote’s concerns over high dollar prices and limited access to Nigerian crude grades.
Argus also reported that NNPC supplied Dangote with over 3.6 million barrels of crude in July, including a 720,000-barrel cargo of Brass River – the first of that grade delivered to the refinery.
While the details of the NNPC-Dangote crude-for-petrol programme are still being finalised, sources suggest it could involve a swap arrangement, with the deal denominated in US dollars, reflecting international market prices but settled in naira.
This structure is expected to alleviate Dangote’s concerns about dollar expenditures while ensuring competitive petrol sales within the domestic market.