Market Report: Nigeria and Niger Conclude Refinery Plans
On Wednesday January 31, Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) urged the new Board of one of its downstream subsidiary companies, the Nigerian Pipeline Storage Company (NPSC) to partner with the private sector to build more pipelines parallel to the existing ones. Baru urged the company to double its pipeline network in the next 10 years, adding that such a target was “absolutely necessary” and such partners would enhance the NPSC’s profitability. Baru described the pipelines as arteries of the nation’s oil and gas Industry, adding that part of the reform process embarked upon by the corporation is to give birth to an NPSC that has a clear focus and sees pipeline storage and distribution as a real business. Baru also charged the NPSC to integrate, through their pipelines resources, the various butanisation depots which are used as reception points for Liquefied Petroleum Gas.
Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources renewed the Federal Government’s commitment to end gas flaring by 2020. Kachikwu who gave this assurance in the monthly OPEC bulletin, said Nigeria’s desire is to end gas flaring 10 years ahead of the 2030 United Nations deadline on flare out. Kachikwu said Nigeria is about 70% compliant with the gas flare exit and hopes to take away the other 30% within the 2020 deadline.
Nigeria and Niger have concluded plans to establish a new oil refinery to meet the petroleum products needs of the two nations. The multi-million dollar plant will be located in the border town between the Republic of Niger and Katsina State, Nigeria. after meeting with the President of the Republic of Niger, Mahamadou Issoufou and the Energy Minister of the Republic of Niger, Mr. Foumakoye Gado, Kachikwu disclosed that “A mutually beneficial agreement was reached for the construction of a refinery in the border town between the Republic of Niger and Katsina State, Nigeria and a crude oil pipeline from the Republic of Niger to the new refinery. A definitive bilateral and technical agreements to be signed in coming days.”
On Thursday 1st February, Tullow Oil announced that its Ghana’s Jubilee oil field commenced a shutdown of the production Vessel FPSO Kwame Nkrumah to enable repair works on the damaged Turret Bearing on the vessel to be done. The shutdown is the first of two planned for the first quarter of 2018 and the final one in the last quarter for remedial works on the FPSO Turret Bearing and rolling it back into place. The shutdown is an opportunity to conduct scheduled maintenance to improve process reliability. The first and second shutdown will be for an estimated three-week period for the completion of work. The first shutdown coincides with the planned Ghana National Gas Company (GNGC) shutdown of the Atuabo Gas Processing Plant; therefore gas supply from the Jubilee field will be replaced by gas supply from the Tweneboa-Enyenra-Ntomme (TEN) to GNGC.
On Thursday 1st February, oil prices continued to rise helped by news of a sharp decline in U.S. stocks of gasoline and distillate supplies and that OPEC members are complying with their deal to limit output. The U.S. West Texas Intermediate crude for March contract was up 66 cents at $65.41 barrel at 4:00 a.m. ET (08:00 GMT), while the ICE Futures Exchange in London Brent oil for March delivery was up 66 cents at $69.55 a barrel. The U.S Energy Information Administration weekly report for Wednesday 31st January showed a rise in crude oil inventories by 6.8 million barrels in the week ending January 26. The report also showed a strong U.S. demand for gasoline and distillates along with weekly declines in domestic supplies of the petroleum products.
Oil prices were also supported after a Reuters survey showed that adherence by producers included in the OPEC deal to curb supply rose to 138% from 137% in December. Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing OPEC’s effort to curb excess supply.