Seven New Modular Refineries Expected to Add 83,000bpd to Nigeria’s Capacity in 2027

Nigeria’s modular refining industry is expected to expand in 2027, with seven additional refineries projected to begin operations at a combined capacity of 83,000 barrels per day (bpd), according to George Maher-Bonnett of Argus Media.

The planned facilities are expected to increase local refining capacity and strengthen the role of smaller refineries in supplying petroleum products to the domestic market.

Maher-Bonnett disclosed this on Thursday during a presentation at the OTL Africa Downstream conference in Lagos, where he examined developments in Nigeria’s petroleum products market amid rising domestic refining capacity and declining fuel demand.

In his presentation, titled African Energy Outlook, he said four modular refineries were operational in Nigeria as of September, with a combined capacity of 32,000 bpd.

“Four modular refineries operating in September, total 32,000 b/d capacity,” he stated.

He added that seven more modular refineries were expected to commence operations next year, bringing an additional 83,000 bpd of capacity to the sector.

The presentation did not identify the proposed refineries, their owners or locations. It also did not provide individual capacity figures or specific commissioning dates for the facilities.

Maher-Bonnett also highlighted the growing contribution of the Dangote Petroleum Refinery to Nigeria’s efforts to meet domestic demand through local production, despite a reported decline in fuel consumption this year.

The presentation attributed the decline in Nigerian fuel demand to “higher flat prices” and noted that the country’s level of self-sufficiency was improving as the Dangote refinery increased production.

“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.

It further observed that increased output from the facility had reduced the attractiveness of importing some petroleum products from Europe into West Africa.

On government intervention in the petroleum market during the period under review, the presentation stated: “No government interventions, besides NNPC price cut this month.”

The outlook also examined developments in Ghana’s refining sector, noting that the 45,000 bpd Tema refinery was increasing production and improving domestic supply.

It added that the economics of transporting petroleum products from Europe to West Africa and from Europe to the United States had weakened, with freight costs contributing to the challenges facing those trade routes.

The projected expansion of Nigeria’s modular refining capacity comes as the domestic petroleum market adjusts to increased local production, changing demand patterns and shifts in international fuel trading.