Nigeria’s refining sector to expand as NMDPRA issues new licenses

Nigeria’s refining sector is set for significant growth with the issuance of new licenses by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The NMDPRA has granted nine Licenses to Establish (LTEs), seven Licenses to Construct (LTCs), and four Licenses to Operate (LTOs) modular refineries, indicating a strong push toward increased domestic refining capacity.

During his keynote address at the 18th OTL Africa Downstream Energy Week in Lagos, NMDPRA Chief Executive Engr. Farouk Ahmed emphasized the country’s target of achieving three million barrels per day in crude oil production and an increase in domestic gas utilization to 10 billion standard cubic feet per day. He noted that expanding domestic refining would position Nigeria as a net exporter of petroleum products

“In the past year, the NMDPRA has engaged stakeholders to revise and consolidate regulations, streamlining the regulatory framework to enhance compliance,” Ahmed stated. He further highlighted efforts to automate processes for improved regulatory clarity.

Ahmed also discussed the development of the West African Gas Pipeline (WAGP) project extending to Morocco, which aims to facilitate the movement of natural gas across West Africa. He suggested a potential partnership with East and Southern African regional regulators to establish a pan-African Energy Regulators Association, which would streamline regulations across the continent.

Ahmed emphasized the promotion of Compressed Natural Gas (CNG) as an alternative to Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), with plans to expand CNG infrastructure under the Pi-CNG, the Decade of Gas Program, and the MDGIF. “Our goal is to accelerate CNG infrastructure expansion at most retail outlets, supporting the growing number of CNG vehicles nationwide,” he said.

Mr. Adetunji Oyebanji, Chairman of the OTL Africa Downstream Energy Week Advisory Board, lauded the recent deregulation of Nigeria’s downstream sector and the commissioning of the Dangote Refinery. He noted that the refinery, with a capacity of 650,000 barrels per day, represents a significant milestone for Nigeria and the entire West African region, setting a foundation for greater competition, transparency, and stability within the sector.

Lagos State Governor Babajide Sanwo-Olu called on investors to collaborate with the government in meeting the rising energy demands of the state. “Our government is committed to ensuring that Lagos leads in energy innovation, investment, and sustainability. We have created an investment-friendly environment that encourages sustainable practices and technological advancement,” Sanwo-Olu stated.

The government’s efforts aim to create a robust energy sector that fosters growth, innovation, and inclusivity, contributing to a transformative period in Nigeria’s refining capacity and energy infrastructure.