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Nigeria's state-owned NNPC said today it has restarted its 210,000 b/d Port Harcourt refinery after three and a half years offline.
Product loadings began today after the plant's smaller, 60,000 b/d capacity crude distillation unit (CDU) came into operation. This gradual restart had been planned by Italian engineering firm Maire Tecnimont, which has been rehabilitating the plant under a $1.5bn contract, although a number of deadlines announced by NNPC have been missed.
Refined products from Port Harcourt will add to the gasoline that has been supplied since September from the 650,000 b/d Dangote refinery. Product imports are likely to fall, an industry source said.
Nigerian downstream regulator NMDPRA's head Farouk Ahmed said products from Port Harcourt will be made available nationwide and would stoke price competition. Nigeria's National Bureau of Statistics (NBS) reported an average national gasoline price of 1,185/litre (70¢/l) for October, a rise of 88pc on the year and 15pc from September. The price of diesel, which has been deregulated since 2003, was an average N1,441/l in October, NBS said, up by 43pc on the year and by 2pc on the month. The Dangote Group dropped its ex-gantry gasoline prices on Sunday, 24 November, to N970/l from N990/l.
Nigerian importers already appear under pressure to compete with Dangote on product pricing, which the Port Harcourt start-up may exacerbate. A local trader said he has found gasoline trading economics most workable when lifting from Dangote ex-single point mooring (SPM) and delivering to coastal ports such as Port Harcourt and Warri in Nigeria's southeast, where truck deliveries from Dangote would prove uneconomic.
Nigeria's presidency and NMDPRA's Ahmed urged NNPC to now bring back online its 125,000 b/d Warri and 110,000 b/d Kaduna refineries, which have been closed since 2019. NNPC has opened a combined tender for operating and maintaining these. The outcome of a similar tender for Port Harcourt is unclear.
Nigeria would become a net products exporter when Warri and Kaduna come online, NMDPRA's Ahmed said today. A source at the regulator said exports might become vital to Nigerian refiners.
"The patronage for petroleum products is low and Nigeria is oversupplied," the source said, attributing the latest Dangote price cut to competition with imports and weak demand.
The prospect of Port Harcourt running at its nameplate capacity is in doubt, sources said. It would at best reach 40-50pc of capacity, the industry source said, which would focus on mainly local gasoline deliveries.
Port Harcourt was shut in 2020 after several years of low capacity utilisation. NNPC previously said it expects the initial 60,000 b/d phase to produce 12,000 b/d of gasoline, 13,000 b/d of diesel, 8,600 b/d of kerosine, 19,000 b/d of fuel oil and 850 b/d of LPG in the first year of resumed operations.
