Nigeria is set to get 4 new South Korean built refineries

In a move to bolster its dilapidated oil production infrastructure Nigeria is looking to partner with South Korea to build several oil refineries across the country. For decades now, the country has been completely reliant on imported petroleum products. However, there seems to be paradigm shift with the emergence of the Dangote refinery.

Nigeria plans to partner with South Korea to build several refineries across the country.The deal involves a consortium of investors from South Korea building four refineries with a 100,000-barrel production capacity each.Nigeria aims to shift from reliance on imported petroleum products to boosting its domestic oil production infrastructure.

A consortium of investors from South Korea, as reported by the Nigerian newspaper, The Punch, recently finalized a deal with the Nigerian government to build four refineries.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, made the announcement on Tuesday, noting that each refinery would have a minimum capacity of 100,000-barrel production per day.

He detailed the plan at the maiden edition of a summit organized by the Crude Oil Refineries Owners Association of Nigeria in Lagos.

The minster during his address, noted that the Nigerian government, which has said on several occasions that Nigeria is open for business, is encouraging investors to put their monies into establishing refineries in Nigeria.

“We encourage investors to build limited refineries by providing an open environment. A recent approval was granted to invite to Nigeria a consortium of investors from South Korea, which intends to establish four 100,000 barrels-model refineries in four different locations in Nigeria,” the minister stated.

“We have adopted the public-private partnership model to unlock investment in the midstream and downstream segments of the oil and gas sector, which will lead to the establishment of more modular and mega refineries,” he added.

The current administration is open to equity investment in modular refineries and other forthcoming refineries as a move to secure energy security, the oil minister revealed.

“The Nigerian Upstream Petroleum Regulatory Commission has developed and published the domestic crude supply obligation guidelines to ensure transparency in the oil industry and ensure access to feedstock by our local refineries.

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In addition, we prioritize and work with stakeholders to ensure effective implementation of the recommendations of the Modular Refinery Committee to give special concessions to local refineries’ owners, thereby guaranteeing feedstock to their refineries,” the minister stated.

“We will ensure the deregulation of the downstream sector is 100 per cent and put in place a necessary framework that will ease the impact on the poor masses.

The ministry has facilitated easier access to existing tax and other exemptions on refinery equipment importation, which is part of our plan to make Nigeria self-sufficient for petroleum producers and become Africa’s petroleum refining hub,” he added.

Nigeria, which was for some time Africa’s largest oil producer, had no refining capacity prior to the recently built Dangote refinery.

Dangote Refinery

The Dangote Petroleum Refinery near Lagos.Pius Utomi Ekpei/AFP/Getty Images

Prior to September, 2024, when Dangote began distributing his refined Premium Motor Spirit (PMS), the country relied completely on imported petrol.

However, in its first batch of petrol, the Dangote refinery loaded 103 million liters of gasoline to the Nigerian National Petroleum Corporation (NNPC), a total of 2,207 trucks.

In a recent report, it was revealed that the Dangote oil refinery is gearing up to take in around 400,000 barrels of Nigerian crude daily over the next few months, shaking up Africa’s import and export scene.

This was according to the cargo allocation list seen by Bloomberg, which disclosed that the 650,000 bpd refinery will receive about 24 million barrels of local oil in October and November as it relies more on homegrown supplies.

The refinery which is situated on approximately 2,635 hectares of land in the Ibeju Lekki area of Lagos State, was commissioned on Monday, 22nd May 2023.

It has a capacity to produce 650,000 barrels per day given that it is the largest oil refinery in Africa and world’s biggest single-train facility.

Plans for other oil refineries

In August 2023, Nigeria’s oil minister revealed that the country expects most of its rundown oil refineries to rehabilitated by the end of the year, including the southern Port Harcourt facility possibly beginning operations as early as December. This unfortunately, did not come to fruition.

Kaduna Refinery

The 110,000-barrel Kaduna plant in the north, as well as three facilities in the oil-rich Niger delta, including the 125,000-barrel Warri refinery, are among four decaying state-owned refineries that used to produce 4450,000 barrels per day in total.

The Port Harcourt refinery was stated to be undergoing a $1.5 billion makeover after Italy’s Tecnimont was awarded the contract for the renovation, which should have been completed by 2021. The oil ministry predicted in April 2022 that the restoration would take 44 months to complete.
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