Nigeria’s Port Harcourt Refinery Embarks on Petroleum Product Export Journey

The recently refurbished Port Harcourt refinery in Nigeria has officially begun exporting refined petroleum products, marking a significant milestone. Its inaugural shipment of low-sulfur straight-run fuel oil was sold to Gulf Transport and Trading Limited, a Dubai-based company.

According to a report by the data analytics firm Kpler, the refinery has initiated operations at its Coolant Distribution Unit 1, currently processing approximately 20,000 barrels per day (bpd). This is part of the facility’s broader capacity of 60,000 bpd, which is presently operating at 70% efficiency. The first shipment, consisting of 15,000 metric tons (approximately 13.6 million liters) of low-sulfur straight-run fuel oil, is set to be transported aboard the vessel Wonder Star MR1 in the coming days. The product, which features a sulfur content of 0.26% and a density of 0.918 g/ml at 15°C, was sold at an $8.50 per ton discount to the Northwest European (NWE) 0.5% benchmark, based on Free on Board (FOB) pricing.

While this development may initially have a limited impact on global very low sulfur fuel oil (VLSFO) benchmarks, it signals a shift in market dynamics, particularly for exporters of refined products in the Atlantic Basin targeting Nigeria and West Africa. The report suggests that the Port Harcourt refinery’s operations will reduce Nigeria’s reliance on fuel imports from Africa and Europe, further curtailing imports across the broader West African region.

The refinery’s low-sulfur straight-run (LSSR) fuel oil is being produced from its 60,000 bpd train, which resumed crude oil processing on November 26. Kpler projects that this unit will maintain production at roughly 60,000 metric tons per month in the near term. Meanwhile, the larger 150,000 bpd section of the refinery remains offline, with plans to restart it once stability is achieved in the initial phase of operations. A complete ramp-up to the facility’s full 210,000 bpd capacity is anticipated by Q3 2025. This expansion could significantly influence Nigeria’s fuel import volumes, which have already been declining due to increased output from the Dangote refinery.

The Nigerian National Petroleum Company Limited (NNPCL) confirmed that the Port Harcourt refinery’s CDU 1 is operational and that product exports via truck delivery have commenced. Kpler’s analysis corroborates this, showing a reduction in crude oil inventories managed by the Pipeline and Product Marketing Company (PPMC)—dropping from 1.5 million barrels in August to 1 million barrels in November, enough to sustain a month of operations at current levels.

Although CDU 1 has a nameplate capacity of 60,000 bpd, it is expected to continue operating at approximately 20,000 bpd for the rest of 2024, gradually reaching full capacity by Q3 2025. If CDU 2 becomes operational by late 2025, the refinery could increase its crude oil intake to 150,000 bpd by December 2026, further raising Nigeria’s total refining capacity to over 700,000 barrels per day.

As a straightforward refinery with limited secondary processing units (Nelson Complexity Index of 4.8), the Port Harcourt plant will primarily produce gasoline, straight-run gasoil, and fuel oil. Projections indicate that by Q4 2025, it could supply 24,000 bpd of fuel oil, 15,000 bpd of gasoline, 15,000 bpd of diesel, 6,000 bpd of jet fuel, and smaller amounts of liquefied petroleum gas (LPG). If the second train achieves full functionality, total production capacity could rise to 82,000 bpd of gasoline, 78,000 bpd of diesel, 20,000 bpd of jet fuel, and 18,000 bpd of residue (including fuel oil and bitumen).

Kpler’s analysis also highlights that the refinery is expected to rely almost exclusively on Nigerian crude grades, as it is owned by the NNPCL. Most of the refinery’s output will likely cater to domestic demand, with only the fuel oil portion designated for export.

This progress comes at a time when Nigeria’s gasoline imports have already hit their lowest levels in seven years, partly due to increased domestic refining capacity. However, efforts to obtain comments from the NNPCL spokesperson, Femi Soneye, regarding this development were unsuccessful.

The Port Harcourt refinery’s advancements are poised to reshape fuel supply dynamics in Nigeria and across the West African region, gradually reducing dependence on imports and stabilizing local markets.

By Bitumenmag

Petroleum, Oil, Refinery, Port