MOSCOW (MRC) -- Nigeria aims to end the country’s so-called oil-for-fuel swaps system in the near future and rely instead on oil products from local refineries, which it hopes to have running again by 2023, reported Reuters with reference to the head of Nigeria’s national oil company NNPC.
The oil-for-swap deals, in operation since 2016, provide virtually all Nigeria’s gasoline and some of the diesel and jet fuel. NNPC exchanges around 300,000 barrels per day (bpd) of oil for the imported fuels.
While NNPC has refineries with a combined nameplate capacity of 445,000 bpd, decades without regular maintenance or investment leaves the oil exporting country almost wholly reliant on imports for refined products. Nigeria closed its ailing oil refineries in April until they can be fixed.
NNPC chief Mele Kyari told a virtual panel at the African Refiners & Distributors Association annual conference that while the swaps had saved the country roughly USD1 billion a year, they could soon be scrapped.
“I don’t see an extension of that process in the near future as we progress and transit into more production locally,” he said.
Kyari said he expected NNPC’s refineries to be fully revamped and running again by 2023. NNPC has said it will partner with private companies to upgrade the refineries and then run them as part of a drive to process its own oil and cut reliance on imported fuels.
“Our plan is to deliver all of them by 2023,” Kyari said. He did not name any companies that have expressed interest in the upgrade and repair projects.
“Our banking partners are on top of this. It is a schedule we have agreed with our partners and we believe we can deliver on this,” he said.
As MRC informed previously, in mid-April, 2020, Shell lifted a force majeure on exports of Nigeria’s Forcados crude oil after the pipeline transporting it reopened. The removal of force majeure followed the reopening of the Trans Forcados pipeline by operator Heritage Energy Operational Services Limited, a spokeswoman for the Shell Petroleum Development Company of Nigeria said on Monday. The pipeline was shut down on April 4, Shell said in a previous statement. It declared force majeure on April 6.
We remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December, 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC