A new integrated refinery and petrochemical plant construction is in the offing in Nigeria. This is after the West African country industrial conglomerate BUA Group signed a deal with French firm Axens for the supply of key refinery process technologies for the facility.
The France largest hydrocarbons group won the contract after a comprehensive process managed by energy consultants KBR, which will also be handling subsequent rounds for the engineering and construction phase of the project.
Built using an undisclosed mix of debt and equity, the new facility will have the capacity to produce 200,000 barrels per day and 10 million tonnes per annum.
Competition in Nigeria’s refinery and petrochemical industry
The new facility situated in the Akwa-Ibom State, in the coastal southern part of the country, sets up a direct competition with Nigeria’s other large refinery project, a 600,000 bpd facility piloted by the Dangote Group that says it will be operational by early next year.
BUA Group Chairman Abdulsamad Rabiu however maintains that this is a win for the Africa’s largest oil-producing country that spends up to 35 percent of scarce foreign exchange to import 90 percent of its petroleum products.
BUA is not only targeting the local and but also the regional market at large. “The projects location in a waterfront offers the marine infrastructure for easy export. And the external market for polypropylene (the other major product from the refinery) is very strong,” the BUA Group Chairman explained.
Space for another refinery project
Rabiu also said that still there is space for another similar project, despite the growing international glut of refinery projects, the tapering of transport fuel use globally, and the strong local competition.
Partly because of the product demand in the region. For example, Nigeria itself uses around 500,000 to 550,000 barrels of petrol every single day.