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NNPC to partner Chevron in building a Condensate Refinery in Nigeria

The Nigeria National Petroleum Corporation (NNPC) is set to collaborate with the international oil company, Chevron Nigeria Limited to establish a condensate splinter refinery.

The NNPC Group Managing Director, Mallam Mele Kyari, disclosed this when the Management of Chevron Nigeria Limited (CNL) led by its Managing Director, Jeff Ewing, paid a business visit to the NNPC Towers, Abuja.

Further Details: While speaking, the NNPC boss noted that it’s very important to set up such a refinery in order to put an end to the shameful act of fuel importation, which the NNPC cannot solely take responsibility for. Kyari also noted that proferring a solution to the problem requires a Joint Venture partnership.

The NNPC GMD further urged Chevron to work closely with the Corporation to evolve modalities for a downward review of the cost structure of crude oil production in Nigeria in order to boost profit and revenue for the country.

“We hold Chevron Nigeria Limited (CNL) in very high esteem for her efficiency and cost optimisation. We look more up to the company to increase production and reserve, reduce cost and increase local refining capacity.”

Earlier Development: Earlier in May, the NNPC revealed it was planning to build a condensate refinery that is specifically for Premium Motor Spirit, also known as petrol.

  • The former NNPC’s Group Managing Director, Maikanti Baru, had hinted in January this year, that the Corporation was working towards establishing some Greenfield refineries, including a condensate refinery.
  • Meanwhile, the Corporation had reportedly completed the feasibility studies on the refinery and the facility would utilise the huge amount of condensate in Nigeria for the production of petrol.

Following this, in a report put together by NNPC, the Corporation’s Group General Manager, Greenfield Refineries Department, Sanusi Usman disclosed,

“Conventional refineries are set up to process crude oil into multiple products, such as PMS (petrol), HHK (kerosene), AGO (diesel), fuel oil and others. Because you are dealing with high volumes here, you need to build different units to process and upgrade the quality of the various products.

“But in the case of a condensate refinery, the feedstock is condensate, not crude oil. And it is just one product you will get from it, which is PMS. This means that it does not need to have many units like a conventional refinery. If it is not very large, you can have the units in modular forms.”

Collaboration with Chevron: In the meantime, Kyari noted that NNPC had done quite well in meeting its financial obligations to Chevron in the last three years, stressing that this was expected to boost the confidence of JV partners to commit to further investment in the upstream sector.

The NNPC boss urged Chevron to collaborate with NNPC to increase crude oil production and grow reserves in the country, stressing that NNPC was ready to work with Chevron to ensure that the Final Investment Decision (FID) on NLNG Train 7 was taken soonest for the benefits of all the investors.

The bottom line: An earlier report by Nairametrics shows Nigeria spent N206.59 billion in just two months. Hence, the proposed collaboration, which is an attempt to increase the production of crude oil and gas, and may completely put a halt to petrol importation and subsidy payment which gulps billions from Nigeria.

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