Energy expert and Co-Founder/ CEO of Dairy Hills, Kelvin Emmanuel, has said that the Nigerian government should treat Dangote Refinery as a national asset as it is the only active refinery in the country.
Emmanuel said this in an interview with ARISE NEWS on Friday, where he urged the government to make changes in its strategy to ensure that crude is supplied to Dangote refinery.
He said, “The only active functional refinery in Nigeria is Dangote, and I will tell you why. Because the modular refineries cannot produce PMS, modular refineries do what they call primary refining, they don’t have what they call catalytic reformer that helps you to do secondary refining to convert NAFTA, which is the base you use to produce PMS, into PMS.
“And for modular refineries that are anywhere between 50 and $70 million to construct between 7 and 10,000 barrels refining capacity per day, the catalytic reformer will cost you anywhere between 25 and $30 million. So far, it’s only one company in Nigeria- Aradel- that is making an attempt to install a catalytic reformer for secondary refining of petroleum to convert NAFTA into PMS. So, the only active refinery in Nigeria that can actually refine NAFTA compound into PMS is Dangote refinery.”
The energy expert, then speaking on the lag in the supply of crude to Dangote refinery, said, “Nigeria is no longer a country without a functioning refinery, Nigeria has a functioning refinery. Now, the question is does it make business sense to invest in the modular refineries and ensure they have catalytic reformers which only four companies, globally by the way, has license to sell, so that they can do secondary refining for NAFTA, which is the base compound, into PMS?
“Well, it might make sense, but now the question you want to ask is if we already have a functional refinery that can do up to 650,000 barrels processing capacity and can produce up to 49.4 million litres of PMS daily, why are we not supplying it feedstock?”
Emmanuel went on to say, “If Dangote is saying that, listen, NUPRC is actually not enforcing domestic crude oil supply obligations, and the gazette it produced based on this year so, it is completely within the law. He’s not saying anything that is extraordinary, he’s not asking for any special favours.”
“It’s important for the Nigerian government to adjust its strategy to ensure that it can guarantee supply to Dangote Refinery, Dangote refinery should be classified as a critical national asset,” he added.
He then outlined the consequences of Nigeria not supplying crude oil to the Dangote refinery as he said, “The risk is this. If, for example, for the month of September, it’s gotten six cargoes, it’s owed nine cargoes, it’s not gotten nine cargoes, Dangote is spending- at 450,000 barrels per day, they’re spending anywhere between $960 million a year on crude oil feedstock. If it has to import feedstock, the business case will make absolute sense for it to also export its derivatives to other countries and not bring it to Nigeria.
“Nigeria will lose out on two things- it will lose out on security of supply, it will also lose out on possible FX revenues from net export proceeds it needs to stabilise its FX market at such a critical time as this.”
Ozioma Samuel-Ugwuezi
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