You know Nigeria’s a major oil exporter, but have you ever wondered how many oil refineries Nigeria actually has? With all that black gold coming out of the Niger Delta, you’d think the country would be covered in refineries churning out gasoline, diesel, and other petroleum products. But as it turns out, Nigeria’s domestic refining capacity is surprisingly limited. Most of the oil gets shipped out of the country for processing elsewhere.
In this article, we’ll take a look at how many refineries are in Nigeria and how many are currently operating. We will also discuss why a major oil exporter like Nigeria still needs to import a lot of refined petroleum products for its own use. It’s an interesting story about oil, economics, and politics in one of Africa’s most populous and dynamic nations.
What is a Refinery?
Oil refineries are gigantic industrial complexes that turn crude oil into useful products like gasoline, diesel, and jet fuel. Crude oil is unprocessed oil that is pumped from below the earth’s surface. To make it useful, the crude oil is heated and separated into different petroleum products based on their molecular weight using a process called fractional distillation.
The distilled fractions are then converted into fuels and other products using chemical processes like cracking, reforming, and blending. Simply put, refineries take the unusable crude oil and refine it into the petroleum products that power our world. Without oil refineries, we wouldn’t have gasoline for our cars or jet fuel for our airplanes.
Overview of Oil Refining in Nigeria
At the moment, Nigeria has four major oil refineries with a total installed capacity of 445,000 barrels per day. However, frequent operational challenges mean Nigeria depends heavily on imported refined petroleum products to meet domestic needs.
The four refineries, two in Port Harcourt, one in Warri, and another in Kaduna, were built between 1965 and 1980. However, due to a lack of maintenance and upgrades, their performance remains abysmal.
This results in very low capacity utilization of the refineries, sometimes less than 20% of the total installed capacity.
To address this, the Nigerian government has been working to revamp existing refineries and build new ones through private-sector partnerships. The Dangote refinery, a private sector initiative, is expected to have a capacity of 650,000 barrels per day.
It is the largest single-train refinery in the world and Africa’s biggest oil refinery. It will help reduce Nigeria’s dependence on imported petroleum products.
With new refineries and the upgrade of existing ones, Nigeria aims to meet its domestic petroleum product needs and also export to neighboring countries. This should significantly reduce the amount spent on petroleum product imports annually.
How Many Refineries Are in Nigeria?
Nigeria has four major oil refineries with a total installed capacity of 445,000 barrels per day.
The Port Harcourt Refinery I was built in 1965 with a capacity of 60,000 barrels per day. The Port Harcourt Refinery II was built in 1989 with a refining capacity of 150,000 barrels per day. Port Harcourt Refinery has two refineries with a combined installed capacity of 210,000 barrels per day.
The Warri refinery was built in 1978 with a refining capacity of 125,000 barrels per day. The Kaduna refinery was built in 1980 with a capacity of 110,000 barrels per day. However, these refineries operate below installed capacity due to a lack of maintenance, aging facilities, and theft or vandalism of crude oil and products from pipelines. The refineries are owned and operated by the Nigerian National Petroleum Corporation (NNPC).
The Two Refineries in Port Harcourt
Port Harcourt is home to Nigeria’s two major oil refineries, collectively called the Port Harcourt Refining Company (PHRC). The first refinery was built in 1965 with a processing capacity of 60,000 barrels per day (bpd). The second was completed in 1989 and can be refined up to 150,000 bpd.
Though well-intentioned, these aging refineries have faced many issues over the years, like equipment failure, fires, and theft, causing them to operate far below capacity. Plans to upgrade the refineries have stalled for decades due to mismanagement and lack of funding. As a result, Nigeria depends heavily on fuel imports to meet demand.
Still, the Port Harcourt refineries remain a major employer in the region, providing jobs for thousands of workers either directly or indirectly. With much-needed repairs and upgrades, these refineries could once again operate at full capacity, improving Nigeria’s economy and energy security. The government aims to overhaul them through public-private partnerships to boost production, but for now, their future remains uncertain.
Warri Refinery
The Warri refinery was built in 1978, located in the Niger Delta. It has a crude oil distillation capacity of 125,000 barrels per day. The Warri refinery refines Bonny Light crude oil into liquefied petroleum gas (LPG), premium motor spirit (PMS), automotive gas oil (AGO), dual-purpose kerosene (DPK), aviation turbine kerosene (ATK), and fuel oil.
This refinery has faced many challenges over the years, including fire incidents, vandalism of crude oil pipelines supplying the refinery, lack of maintenance, aging facilities, and cash flow problems preventing the importation of essential materials and spare parts. Several turnaround maintenance (TAM) have been planned to overhaul the refinery but rarely executed.
The poor state of this refinery has led to its low performance and capacity utilization. There is an urgent need for revamping and upgrading this refinery to meet its nameplate capacity and produce higher quality petroleum products that meet international standards to reduce importation costs.
Kaduna Refinery
The Kaduna Refinery, built in 1980, is one of Nigeria’s major oil refineries. Located in Kaduna State in northern Nigeria, it has a crude oil refining capacity of 110,000 barrels per day.
The refinery processes imported light crude oil into fuel products like gasoline, diesel, kerosene, and jet fuel which are vital petroleum products crucial for transportation and powering vehicles as well as aircraft across Nigeria. Despite its nameplate capacity, the actual refining capacity of the Kaduna refinery has deteriorated over time due to a lack of maintenance and upgrades.
At optimal capacity, the Kaduna refinery can meet about 50-60% of northern Nigeria’s petroleum product needs. However, frequent disruptions from pipeline vandalism, as well as the refinery’s obsolete technology, have made it hard to operate at full capacity. The refinery is in dire need of repairs and upgrades to boost its productivity and profitability. With major investments and overhauls, the Kaduna refinery has the potential to significantly impact Nigeria’s economy by reducing fuel imports and contributing to economic growth.
Who Built Nigeria’s First Refinery?
The first oil refinery in Nigeria was built by Shell Petroleum Development Company (SPDC). SPDC partnered with British Petroleum (BP) to establish the first oil refinery, with each owning a 50 percent stake. The 38,000 barrels per day (bpsd) Shell-BP Refinery was completed and commissioned in 1965. Which is the Largest Refinery in Nigeria?
The largest oil refinery in Nigeria is the Dangote Petroleum Refinery, built at a cost of $20 billion, which has begun production in Lagos, Nigeria, and the country’s reliance on imported refined petroleum products is projected to end.
Private Refineries in Nigeria
These are the major private Refineries in Nigeria:
Azikel Refinery (Azikel Petroleum)
Azikel Refinery, owned by Dr. Eruani Azibapu Godbless CFR, a Nigerian billionaire businessman who owns the Azikel Group conglomerate, is currently under construction in Nigeria. Once completed, this midsize refinery will have a refining capacity of 12,000 barrels per day.
The Azikel Group has confirmed that the Azikel Petroleum Refinery, Nigeria’s second-largest privately owned oil refinery with a capacity of 12,000 barrels per day, is now more than 87% complete.
The Azikel Refinery will focus on refining crude oil into diesel, kerosene, and naphtha. The refinery aims to meet the needs of Nigerians for petroleum products and reduce reliance on imported fuels. It will also provide many job opportunities, especially in the Niger Delta region where it’s located.
Overall, the Azikel Refinery represents the potential for the Nigerian oil industry to improve its refining capacity and better support the nation’s energy demands with domestic production. The successful completion of this refinery would be an important step forward for Nigeria’s energy independence and economy.
Dangote Refinery (Dangote Group of companies)
The Dangote Refinery is a new oil refinery owned and operated by the Dangote Group, one of Nigeria’s largest companies. Located in the Lekki Free Trade Zone near Lagos, the refinery is the largest in Africa, with a processing capacity of 650,000 barrels per day.
This mega refinery aims to meet all of Nigeria’s fuel needs and export refined products to other countries. By creating fuel products domestically, Nigeria can reduce its dependence on imported petroleum and ease pressure on its currency, the naira.
Ogbele Refinery (Niger Delta Petroleum Resources)
Ogbele refinery is operated by Niger Delta Petroleum Resources; it is one of Nigeria’s smaller refineries with a capacity of 11,000 barrels per day. Located in the town of Ogbele in Rivers State, this refinery started operations in 2010. It is privately owned and mainly processes crude oil from small independent producers in the Niger Delta region. The refinery produces liquefied petroleum gas, premium motor spirit, dual-purpose kerosene, automotive gas oil, and fuel oil.
Waltersmith Refinery (Waltersmith Refining and Petrochemical Company)
Waltersmith Refining and Petrochemical Company operates the Waltersmith Refinery. Located in Ibigwe, Imo State, the refinery has a crude oil processing capacity of 5,000 barrels per day. Waltersmith Refinery focuses on producing kerosene (paraffin), diesel oil, and naphtha for the domestic market.
The refinery started production in December 2020, helping to meet local demand for petroleum products and reduce Nigeria’s dependence on imported fuel. The refinery uses a simple hydro-skimming process to refine crude oil into petroleum products. Waltersmith Refinery obtains its crude oil feedstock from the nearby Ohaji South oil field operated by Seplat Petroleum.
Conclusion
So there you have it. Nigeria has four major refineries, but only one is partially operational. These refineries have faced many challenges over the years, from lack of maintenance to vandalism to corruption. Getting them fully up and running has been an elusive goal for successive Nigerian governments.
While new private refineries are in the works, the future is still uncertain when it comes to oil refining in Nigeria. Dangote Refinery recently started operations. We hope it will live up to its expectations.
The people continue to hope that one day, Nigeria will have enough refining capacity to supply its domestic needs and even export refined products. For now, though, the country remains heavily dependent on imported fuel. As you can see, the refinery situation in Nigeria is complex, with many factors at play. However, the demand for fuel continues to rise, so developing more refining capacity will likely remain a priority in the years ahead.