The rehabilitation of the country’s refineries would commence in the second quarter of 2018, the Nigerian National Petroleum Corporation (NNPC) disclosed on Tuesday.
Speaking at the African Refiners Association’s conference in Cape Town, Chief Operating Officer of Refineries and Petrochemicals in the NNPC, Mr. Anibor Kragha, said the state oil company was in the final stages of talks with consortiums including top traders, energy majors and oil services companies to revamp the refineries in an effort to reduce the country’s reliance on imported fuel.
“We believe that by the second quarter of this year we will start getting the ball rolling on the refurbishment and rehabilitation exercise and believe this will run to the end of next year.
“We are working with consortia right now, negotiating terms, trying to finalise the time sheets so that we can access the money through the end of 2019 when we believe we will have the minimum 90 per cent capacity utilization in place,” Kragha said.
According to him, Nigeria will begin lowering the top level of sulphur in diesel to 50 parts per million (ppm), from 3,000 ppm from July 2018. He noted that Nigeria is already targeting a cut to 150 ppm by October 1, 2019, stating however, that while Nigeria was committed to cleaner fuel standards, significant costs complicated efforts to meet the deadline.
Kragha explained that the first shift to cleaner gasoline would cost $11.7 million per month, and the second $15.7 million per month.
The diesel reduction would cost $2.8 million per month. He maintained that diesel prices are deregulated, meaning consumers would pay directly for the better-quality fuels, while Nigeria’s own oil refineries would have until 2021 to meet the new sulphur levels.