Seven new modular refineries are set to begin operations in Nigeria in 2027 with a combined capacity of 83,000 barrels per day, according to Argus Media analyst George Maher-Bonnett. Speaking at the OTL Africa Downstream conference in Lagos on Wednesday, Maher-Bonnett said four modular refineries operated in Nigeria in September with a total capacity of 32,000 barrels per day. The projected additions would represent more than two and a half times the combined capacity of those existing facilities, significantly expanding the country's smaller-scale refining sector.
The expansion comes as Nigeria's petroleum products market undergoes substantial changes. Maher-Bonnett noted that Nigerian fuel demand has declined this year, which he attributed to higher flat prices. The country's self-sufficiency in petroleum products is improving, driven partly by the Dangote Petroleum Refinery at Lekki, which operates at a high rate with steady petrol output. The only government intervention in the market during the period covered was an NNPC price reduction this month, according to the presentation.
The Dangote refinery, with a capacity of 700,000 barrels per day, is running hard and has reduced the attractiveness of importing some petroleum products from Europe into West Africa. Regional dynamics are also shifting, with Ghana's Tema refinery, which processes 45,000 barrels per day, ramping up production and improving the country's self-sufficiency. Freight costs and the economics of shipping petroleum products from Europe to West Africa and to the United States have weakened, affecting the competitiveness of those routes.
However, the presentation did not identify the seven proposed refineries, their owners, locations, individual capacity figures or commissioning schedules. The expansion reflects Nigeria's broader strategy to increase domestic refining capacity and reduce dependence on imported petroleum products as international market conditions shift. For savers and borrowers in Nigeria, increased local refining capacity could eventually influence the cost of petroleum products and government revenues that fund public spending and debt servicing.