ARDA: Why Nigeria Will Remain Major Petrol Importer

By Babajide Okeowo

The lack and inadequacy of new refining projects in Nigeria will keep the country as a major importer of refined products despite being a major oil-producing country, the African Refiners and Distributors Association (ARDA), has disclosed.

Anibor Kragha, Executive Secretary, ARDA made this known in an interview with S&P Global Commodity Insights.

“Because our demand in Africa is going to grow so much, we’re still going to have a shortfall,” he said.

Major refining projects due to come on stream include the Dangote refinery in Nigeria with a planned capacity of 650,000 bpd and Cabinda in Angola with a capacity of 60,000 bpd.

Kragha said he expected phase one of the Dangote refinery to come on stream in the first quarter of 2024 at the latest and phase one of the Cabinda refinery by the end of 2024.

“So that would definitely be a boon for energy security for the continent because we would reduce the imports to the continent, but we still need more refining capacity,” he said.

Devakumar Edwin, a senior Dangote executive who is overseeing the refinery, told S&P Global in a recent interview that it would start up in October at 370,000 bpd and begin ramping up to full capacity in Q4 2023.

Kragha said ARDA also supported other projects, including the Tema Refinery in Ghana coming back on stream to further help the security of supply in the region.

Total African refined product imports have been stable at around 2.3 million bpd in recent months, according to S&P Global Commodities at Sea data.

Beyond refining capacity, Kragha said there needed to be a strategic discussion on storage and distribution assets in Africa, and which projects should receive investment.

“As a perfect example, if you have a deepwater port in Africa that is 14 meters depth or larger, you save $15/mt on importing products because you can bring larger vessels in. When you start to look at countries like Nigeria with huge imports you start to see where you can make savings,” Kragha said.

He pointed to refineries closing in South Africa at a time when neighbouring Namibia has discovered major crude reserves as indicative of issues that need to be addressed in conversations about strategy.

Market instability in Africa is also an issue facing refiners and governments, he said.