The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has taken a significant step towards bolstering Nigeria’s domestic refining capacity by issuing licences for nine modular refineries.
The move, announced by NMDPRA Chief Executive Farouk Ahmed at the 2024 Oil Trading & Logistics Africa Downstream Energy Week in Lagos, is part of the Federal Government’s broader strategy to enhance energy security and reduce reliance on imported petroleum products.
Expanding Refining Capacity
Ahmed highlighted the significant progress made under President Bola Tinubu’s administration, particularly with the commissioning of the Dangote Refinery. The NMDPRA has issued a total of nine licences for establishing modular refineries, seven for construction, and four for operation.
“Over the course of the last year, the NMDPRA has revised and consolidated its regulations through strategic industry stakeholder engagements with a view to streamlining the regulatory framework for ease of doing business and compliance,” Ahmed explained.
Liberalisation of the Energy Market
The NMDPRA is also actively working to liberalise the Nigerian petroleum market. By implementing robust policies and providing generous incentives, the government aims to attract both domestic and international investment in the energy sector.
“Our inspired target is to achieve a fully liberalised and mature market for all petroleum products and natural gas, where the market fundamentals lead to robust price discovery and attractive investment opportunities,” Ahmed stated.
Addressing LPG Affordability
To make Liquefied Petroleum Gas (LPG) more accessible and affordable for Nigerian consumers, the NMDPRA is engaging with stakeholders to develop a domestic LPG pricing framework. The agency is also exploring opportunities to domesticate LPG production from companies like Chevron Nigeria Ltd, Mobil Producing Nigeria Ltd, and the Nigerian LNG.
“NMDPRA will engage stakeholders in development of domestic LPG pricing framework in order to make the product readily available and affordable for the consumers,” Ahmed said.
Gas Sector Potential
The gas sector holds significant potential for Nigeria’s energy future. The country boasts 16 billion standard cubic feet per day of licensed processing capacity, 5 billion standard cubic feet per day of licensed transportation capacity, and 1.5 billion standard cubic feet per day of licensed distribution capacity.
“Nigeria is poised to actualise the targets of 2 million barrels per liquid oil production, projected 10 billion standard cubic feet of gas target for domestic utilisation, and a robust domestic refining capacity, leading Nigeria to become a net exporter of petroleum products,” Ahmed concluded.
As Nigeria continues to implement reforms and invest in its energy infrastructure, the country is well-positioned to enhance its energy security, stimulate economic growth, and improve the quality of life for its citizens.
