Wednesday, April 21,
2021 / 03:32 PM / by
CSL Research / Header Image Credit: Twitter; BUAGroup
BUA Group, one of the leading business conglomerates in Nigeria, recently signed a progress acknowledgement statement for Axens, a French firm that prides itself in powering integrated solutions worldwide. This acknowledgment is coming after an agreement reached by the two parties on 1 September 2020, for Axens to supply process technologies for the design and construction of BUA's 200,000bpsd petrochemical refinery in Akwa Ibom State. Going by the progress so acknowledged, the refinery project now has an estimated completion time of four years. At completion, the refinery is expected to serve as a source of gasoline, diesel, jet fuel (meeting Euro-V specifications) for the Nigerian and larger African markets.
BUA cement has sustained giant strides in its bid to be a leading business conglomerate in Africa, evidenced by its commitment to maintain active participation in the fields where it currently operates. Apart from its investment in the petrochemical sector, the firm is also currently neck-deep into its sugar refinery with an expected completion date of 2022, among other projects.
There have been sustained efforts to improve local refining capacity, given that most of the existing and government-owned refineries are moribund. About 80% of the refined petroleum products consumed in Nigeria are currently being imported, implying huge FX requirements which burdens the nation's current account balance. Nigeria's refineries have long operated at low levels due to many years of underinvestment and poor maintenance.
By completing BUA's petrochemical refinery, there would be at least an additional 850,000bpsd local refining capacity (excluding capacities from modular refineries) for Nigeria and Africa at large. Ultimately, this development and the output from the increasing number of the local modular refinery are expected to provide the needed supply for local consumption, which according to the NBS Q1 2020 oil import and consumption report, is 5.36bn litres (364,092bpsd)
Overall, activities in the Nigerian Oil and Gas sector have improved drastically over the past three years. While private sector players such as Dangote, BUA and the private operators of the growing number of modular refineries are on the one hand buoying refining capacity, the FG had just approved the upgrade of Port Harcourt refinery (a 60,000bpsd capacity refinery) and has put in place a monitoring team that would ensure the funds are effectively utilized. Given the scale of demand for petroleum products in both Nigeria and the entire ECOWAS region, the country stands to gain significant export revenues if it increases local refining capacity.