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Modular Refineries Panacea To Petrol Importation

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It is not in doubt that Nigeria is one country that is beautifully endowed with natural resources, especially hydrocarbon. She is rated the largest oil producer in Africa and the sixth in the Oil Producing and Exporting Countries (OPEC). She was the fifth largest supplier of crude to the United States of America (USA) until the shale gas discovery, an alternative source of energy, and the eleventh in the world.

Recently, at a three-day annual conference and exhibition of the Society of Petroleum Engineers (SPE) Nigeria in Lagos, the Petroleum Minister, Mrs Diezani Alison-Madueke, said critically the nation’s crude oil reserve was over 36 billion barrels and a current production capacity of about 2.5 billion per day which she acknowledged have made Nigeria the highest supplier of crude oil.

Alison-Madueke also expressed government’s determination to meet the oil reserve’s growth target of 40 billion barrels and an increase in production capacity to 4 million barrels per day by 2020. But the country still remains a net importer of petroleum products.

It is based on the premise that Nigeria being so richly endowed with crude oil but keeps importing refined petroleum products that stakeholders in many fora do not hesitate to condemn this action. Some describe it as a shame and scandalous.

Presenting a paper titled, “Sustainable Refinery Turnaround Maintenance” at the First International Conference on Petroleum Refining and Petrochemicals in Port Harcourt recently, Engr Tony Ogbuigwe, Group Executive Director Refining and Petrochemicals, Nigerian National Petroleum Corporation (NNPC) disclosed that within the past five years, the sub-optimal refinery capacity utilisation in the country averages about 20 per cent, while the bench-mark elsewhere was 60 to 80 per cent.

Mr Reginald C. Stanley, Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA) also delivering a paper at the same conference buttressed on the non-functional and low capacity utilisation of the nation’s refineries saying that the four local refineries with the capacity of 445,000 bpd capacity could only contribute about four to twenty per cent in the past five years to the national Petroleum Motor Spirit consumption.

Therefore, getting the four existing refineries to function efficiently is indeed a long term solution to meet the domestic demand for petroleum products in the country.

The President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Babatunde Ogun was quoted as saying that “If the TAM of the four refineries are done, which is supposed to be like 24 months give or take …. We would have been able to achieve about 80 per cent of what we expect if all of them are working maximally”.

However, some industry experts say with the four refineries functioning maximally they could still not adequately meet our local demand. Besides, there are other neighbouring countries that depend on us for these products. How do we meet this demand when the four refineries, at peak production, could barely meet domestic demand?

The need for a change of paradigm from a net importer of refined petroleum products to a major net exporter with our richly endowed raw material makes the call by Professor Godwin Igwe for the establishment of a modular refinery in each of the 36 states of the federation necessary. There is no nation, the world over, that can attain riches by exporting its raw materials without having a vibrant industrial base.

According to Prof. Igwe, to be a net exporter of refined petroleum products, the establishment of modular refineries in the 36 states of the federation is a must.

He said modular mini-refineries can provide flexible and cost effective supply option for crude oil producers in remote areas and very useful where there was a need to adapt rapidly to meet local demand.

He explained that with modular refineries which have relatively low capital cost, easy to construct and high speed, unit modules from 4,000 bpd up to 30,000 bpd primary distillation capacity could be produced. It could also be improved with debottlenecking to create a refinery of 100,000 bpd production capacity or more, he noted and added that they are usually prefabricated in workshop conditions and shipped to site for assembly.

Close proximity to crude supply, nearness to sizeable market and with logistic advantages which would decrease high distribution costs in remote regions, project finance on preferential terms from development credit agencies and some government incentives to regional development were some of the conditions required to make investment in modular refineries workable.

Explaining further on refinery investment, the professor in chemical engineering said, “the overall economics or viability of a refinery depends on the interaction of three key elements: the choice of crude oil used or crude state; the complexity of the refining equipment or refinery configuration; and the desire type and quality of products produced or product state.

Prof. Igwe, however, acknowledged that due to the importance of crude oil to the petroleum refining industry, the transportation cost associated with moving it from the oil field to the consuming regions and the crude qualities have made it more economical for distant refineries to use imported crude. But pointed out that similar factors have led some countries to the development of modular mini-refineries in crude producing regions since locating them close to the source of crude minimizes the logistics and distribution cost.

Instances of countries that have adopted the use of modular refineries include Papua New Guinea, Eromanga, Queensland Australia, Indonesia, Iran and Iraq.

In view of the foregoing, the effort of the federal government in signing a Memorandum of Understanding (MoU) with Petroleum Refining and Strategic Reserve (PRSR) Ltd and Vulcan Capital Corporation (VCC) Ltd for the establishment of six modular refineries in the country is very commendable.

The NNPC said in a letter that “the establishment of modular refineries is practicable and desirable to increase local refining capacity. The Corporation will be available to conduct detailed technical evaluation in conjunction with the investor group subsequently” and promised to make “utmost endeavour to ensure oil supply to the planned six modular refineries” but “subject to availability and location of refineries”.

This, indeed is a step in the right direction and should not only end at just six but more, may be the 36 suggested by Prof. Igwe if the nation must move from the present quagmire.

 

Vivian-Peace Nwinaene

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CBN Appoints Eight New Pre-shipment Agents For Crude Oil And Gas Exports

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The Central Bank of Nigeria (CBN) has appointed eight pre-shipment inspection agents to monitor crude oil and gas exports, alongside two monitoring and evaluation agents to oversee their activities.
The appointments, announced in a notice signed by Aderinola Shonekan, Director of the CBN’s Trade and Exchange Department, took effect on October 2, 2026, under the Nigerian Export Supervision Scheme.
The notice directs authorised dealer banks, the Nigeria Customs Service, petroleum regulators, terminal operators and oil and gas companies to comply with the revised arrangements.
The CBN assigned the eight inspection agents to specific crude oil and gas export terminals as part of the revised framework.
The allocations are as follows:
Dakee Engineering and Construction Ltd.: LNG, Escravos (Gas), Bonny River Terminal (BRT) and EGTL.
Trexem Energy Services Limited: Egina, Qua-Iboe and Tulja. Geoscape Limited: Escravos, ERHA, Odudu and FSO Cawthorne.
617 Limited: Bonga, Brass, Usan and Eagle.Robinson International Energy Ltd.: Ugo-Cha, Penington, Aje, Ima, Oyo and Nembe. Trobell International Nigeria Limited: Forcados, Bonny and Okwori.
Integrated Shipping Services Nigeria Ltd.: Akpo, Antan, Okoro, Anyala-Madu and Ebok.
Kephren Business Ltd.: Ukpokiti, Utapate, Yoho, Abo, Agbami, Ajapa, Okono, Okwok and additional marginal streams designated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The CBN also appointed two monitoring and evaluation agents, the Q&Q Control Services Limited and the Arlington Securitas Nigeria Limited to oversee the inspection companies.
The Q&Q Control Services Ltd. would monitor 617 Limited, Trexem Energy Services Limited, Geoscape Limited and Kephren Business Ltd while the Arlington Securitas Nigeria Limited would monitor Dakee Engineering and Construction Ltd., Trobell International Nigeria Limited, Robinson International Energy Ltd. and Integrated Shipping Services Nigeria Ltd.
The latest appointments follow previous changes to the CBN’s monitoring arrangements for crude oil and gas exports.
The latest changes update the companies responsible for inspecting export cargoes and the terminals assigned to them. The notice requires the relevant institutions and operators to comply with the new allocations from October 2, 2026.
The appointments also come amid growth in Nigeria’s gas export earnings.
According to the CBN, Nigeria’s gas export earnings rose to $2.53 billion in the first quarter of 2026, reflecting stronger earnings from the country’s natural gas sector and contributing to its external trade position.
The revised inspection arrangements place designated agents in charge of specified export terminals, while the monitoring and evaluation companies oversee the inspection agents’ activities under the scheme.
Recall that in May 2024, the apex bank appointed 11 pre-shipment inspection and monitoring agents under the export supervision scheme.
The government subsequently reviewed the allocation of oil export terminals in March 2025, assigning additional terminals to nine inspection agents appointed under the scheme.
In July 2026, the CBN also appointed Candid Oil Services Limited as the pre-shipment inspection agent for the Taurus Oil and Gas Depot.
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What’s Next for Global Natural Gas Demand?

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The Iran war and the lack of LNG supply from the Middle East have upended forecasts of near-term natural gas demand and import costs.
So far this year, economies in Europe and Asia have relied more on renewables and coal for power generation to offset reduced gas supplies procured at very high prices.
This year’s crisis has prompted governments to rethink energy policies with energy security the top priority, again, after the 2022-2023 energy crisis.
After the decline in global gas demand this year, due to prices at four-year highs, the obvious question for gas market participants is where demand is going after the current crisis ends. Has the second gas crisis in four years permanently undermined expectations of long-term gas demand growth?
Gas cannot be replaced in many industrial processes, yet. Electricity-generating systems in major economies that have relied on gas for power cannot have a reliable electricity supply without gas.
Still, this year and over the past four years, key gas markets in Europe and Asia have seen the share of gas in their electricity mix decline.
The UK, the Netherlands, and Turkey, and major Asian economies China, Japan, and South Korea, have all seen the share of gas-fired electricity drop, according to data from think tank Ember cited by Reuters columnist Gavin Maguire.
The spike in natural gas prices has accelerated Europe’s renewables rollout, which took off in earnest earlier this decade when Russia invaded Ukraine in 2022 and cut off pipeline gas supply to most of Europe. The share of renewables has surged in the EU and the UK in recent years, gradually sidelining gas as the reliable backup fuel rather than the one meeting growing electricity demand.
Globally, “Gas is losing its share in the global power mix as renewables increasingly meet rising electricity demand,” Ember said in a report earlier this year. The analysis found that the share of gas in the global power mix declined for the fifth consecutive year in 2025, despite a small rise in absolute gas generation. Strong growth in clean power, led by solar and wind, met around 68% of global electricity demand growth over the five years to 2025, reducing the need for a significant rise in gas power generation
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According to Ember, 61 out of 124 economies generating electricity from gas had passed their gas generation peak.
However, these countries accounted for around one-fifth of global gas-fired electricity generation in 2025. So the large gas-generating economies, albeit a smaller group, haven’t seen their peak in gas power generation.
The biggest emerging economies, China, India, and Brazil, have actually met their surging electricity demand without turning to gas, Ember noted.
China’s gas share remained close to 3% of the electricity mix in 2025 despite rapid demand growth, while gas power generation in India and Brazil plays a more limited balancing role, the think tank said.
“The economics and energy security case for electricity are increasingly moving in the same direction,” said Malgorzata Wiatros-Motyka, ?Senior Electricity Analyst at Ember.
“As renewables lower costs and reduce exposure to fuel price shocks and geopolitical disruptions, gas is steadily losing the advantages that once made it the default fuel for power system growth.”
The writing may have been on the wall for natural gas producers and exporters if natural gas was only used in power generation.
But natural gas key uses include as feedstock in industrial manufacturing, including cement and steel, as a chemical feedstock for fertilizer, or as the start of the supply chain of manufacturing plastics, paints, synthetic fabrics, and medicine, to name a few.
And then comes the biggest twist in energy and electricity demand forecasts in recent years—the AI boom. Data centers will drive a large part of the rise in global electricity demand, which has returned to growth even in the U.S. and Europe after a decade or so of flatlining. Renewable energy alone will not meet the surge in power demand, and gas will play a key role in America and in most of Asia, where many countries are positioning to become AI and data center hubs.
The biggest LNG producers, exporters, and traders see long-term gas demand growth intact despite this year’s supply shock that is reducing consumption amid spiking prices.
For example, Shell, the world’s biggest LNG trader, said in its annual LNG Outlook 2026 this summer that surging gas demand in South and Southeast Asia would push global LNG demand up by 65% by 2050 from 2025 levels, although growth this year has been stalled by the Strait of Hormuz crisis.
Shell sees global LNG demand increasing to nearly 700 million tons annually by 2050, up by around 65% from the 2025 levels of 422 million tons.
“The conflict created a system-wide shock with disruption cascading across all segments of the economy, but the LNG industry has proved resilient and able to adapt to changing market conditions,” Cederic Cremers, President of Integrated Gas at Shell, commented in the outlook.
“While more investment in both supply and demand infrastructure is needed, the long-term outlook remains strong and LNG will continue to be a stabilising force in the global energy system.”
The International Gas Union (IGU) said in its 2026 World LNG Report in July that “while LNG industry is not immune from the challenges of operating in an era of heightened geopolitical uncertainty, its unique ability to re-distribute large quantities of clean-burning energy from a broadening supply base only enhance LNG’s role as a ‘shock absorber’ to the global economy.”
By; Tsvetana Paraskova
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Seplat Discovers 19m Barrels of Oil, 157 Bcf of Gas In Imo

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Seplat Energy has made a new oil find in commercial quantities through its Aku-01 exploration in onshore Imo State under Oil Mining Lease (OML) 53.
The accidental discovery was not part of its original exploration programme, Seplat said in its latest unaudited earnings report on Thursday, adding that its preliminary estimates put the gas deposit at 157 bcf and the oil resource at 19 mmbbls.
“The well is currently being completed as a potential future production well, that will be tied-back to existing infrastructure, supporting early monetisation of the hydrocarbon resources,” Seplat stated.
“The discovery also de-risks four adjacent prospects,” it noted, adding that it expects to test one of the four prospects during the next exploration stage
Encouraged by this initial success, Seplat now looks to commence the second phase of exploration in the oilfield as early as next year, with five reservoir intervals already uncovered during the discovery.
Seplat holds a 40 per cent participating interest in OML 53, a stake it acquired from Chevron in 2015. NNPC Limited, its joint venture partner, owns the remaining shares.
The discovery comes as the federal plans to scale up oil production to 3 million barrels per day by 2030 from current production level of 1.72 million (including condensates) as the government steps up efforts to attract more foreign capital to the energy sector.
Africa’s largest crude producer has been pursuing a series of reforms, including deep offshore tax incentives, more transparent block licencing rounds and implementation of drill-or-drop policy, among others to achieve its oil output expansion.
According to the chief executive of the Nigerian Upstream Petroleum Regulatory Commission, Oritsemeyiwa Eyesan, the upstream regulator has granted approval to field development plans worth over $57 billion in the past two years to enable such projects to advance to final investment decisions.
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