- Says review of gas terms underway
Chineme Okafor in Abuja
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said that Nigeria will begin to export refined petrol and other petrochemical products within the next four years if plans to ramp up the country’s domestic refining capacity work out well.
Kachikwu stated this recently in Abuja when he briefed journalists on his plans for the country’s petroleum sector.
He noted that if the plans to co-locate new refinery investments within the country’s existing refinery complexes in Kaduna, Warri and Port Harcourt become successful, and the private refinery owned by the Dangote Group comes on stream, Nigeria will produce more petrol than she needs and then export the excess.
He explained that it would take at least three years to get the co-located refineries to begin production, adding that Dangote’s is expected to come on stream between 2019 and 2020.
“The policy on the whole is that we must target a time frame of 12 and 18 months to get out of importation.
“It is not good for the country, it is not a good image, it does not create jobs and we lose tax when it comes to the government and creates a huge amount of quite frankly, emotional backlash when people have to queue looking for fuel,” said Kachikwu.
He said that Nigeria, which imports most of her the petrol she needs for her domestic use was working feverishly to get joint venture partners who can come in and set up new refineries in the country.
“We have advertised recently for co-located refineries and asking people to come and co-locate new refineries into our refineries’ premises so that they can share pipelines, tankages and we are working hard to see that we can complete whatever refinery upgrade we are trying to do within the next 12 to 18 months and obviously for the co-located refineries which are the new ones, targeting to see that we are able to finish within two to three years,” he said.
According to him: “If we do that, obviously we will have excess production capacity for refined products and bear in mind that obviously Dangote is also bringing in its refinery which probably is hitting up about 2019/2020.
“At that point, we begin to look at export market and that really is what we should be doing given the sort of behaviour of oil prices today.”
The minister also talked about improving the incentives for private investments to come in and help upgrade the country’s gas production and supply infrastructure.
He noted in this regards that works on new terms for gas businesses was already going on in the ministry. That, he stated would be discussed further with the oil majors to get their inputs.
“We need to finalise gas terms. A team within the ministry is working very hard now to come up with gas terms and negotiate those gas terms with majors because if the gas terms are there, the investments will go in and once there is certainty we can grow those,” Kachikwu stated.
He added: “Once we have parallel revenues that can come in from gas and some extent the petrochemicals, the reliance on crude oil revenue will ease, so gas is very critical not just in terms of our earning cycle but also in terms of our power mix, being able to supply power to the Nigerian public.”
“I know that the ministry of power is targeting about 7000 megawatts for 2016 and some portion of 2017, and stranded gas is key.
“We need to get infrastructure to get that gas through NPDC or third parties so we have sufficient gas to power the turbine and so we are working on that and the sort of numbers or duration that I see is a period of one to two years to get us this level,” he further explained.