The Petroleum Merchandise Retail Retailers House owners Affiliation has concluded preparations with the Dangote Petroleum Refinery to straight raise petroleum merchandise for distribution to depots and stores of PETROAN members nationwide.
PETROAN introduced this on Saturday because the Port Harcourt Refining Firm reportedly commenced exporting low sulphur straight-run gas oil, with its first cargo to Dubai, United Arab Emirates.
Business operators, nevertheless, expressed various views concerning the reported export following issues concerning the refinery output because it started operations.
The PHRC formally commenced operations on Tuesday, November 26, 2024, after a collection of postponements of its resumption dates by its managers — Nigerian Nationwide Petroleum Firm Restricted.
On Friday, PETROAN introduced in a press release issued by its Nationwide Public Relations Officer, Dr Joseph Obele, that the gas retailers had struck a deal to offtake merchandise from the Dangote refinery after a number of negotiations with the $20bn Lekki-based plant.
It mentioned the settlement, coming nearly a month after the Unbiased Petroleum Entrepreneurs Affiliation of Nigeria secured the primary offtaking approval, ensures the supply of petroleum merchandise in the course of the upcoming yuletide season.
Obele defined that the settlement was reached throughout a gathering with officers from the Dangote refinery on Monday, December 2, 2024.
He said that the affiliation reached a consensus on reserving month-to-month quantity for PETROAN, fee modalities, and a beneficial value fee.
The assertion learn, “The Nationwide President of PETROAN, Dr Billy Gillis-Harry, on Monday, December 2, 2024, led the negotiation group of PETROAN to a fruitful strategic enterprise assembly with the administration of Dangote refinery on the advanced in Lagos.
“PETROAN is impressed with the end result of the strategic enterprise assembly, which was evidenced by the institution of a seller-buyer relationship, reservation of month-to-month quantity for PETROAN, fee modalities, and a beneficial fee.
“The sealing of a transactional cope with Dangote refinery was the aftermath of a profitable buyer-seller negotiation and settlement secured by PETROAN on the strategic assembly.”
PETROAN additional said its proper to not reveal intricate particulars of the deal however expressed optimism that most of the people could be the most important beneficiary.
It added, “We reserve the fitting to not make public the enterprise phrases and circumstances, whilst we specific optimism that the best beneficiaries in all shall be most of the people because it issues product availability and affordability.”
Persevering with, the assertion learn, “The nationwide headquarters of PETROAN, Abuja, has expressed confidence that the measures put in place by the affiliation following the graduation of manufacturing on the Port Harcourt refinery and fruitful deliberations with the administration of Dangote refinery will avert gas provide shortages throughout and after the festive season.
“PETROAN dismisses any type of gas shortage issues and cautions towards panic shopping for as it’s unsafe and harmful to inventory petroleum merchandise at house. PETROAN additionally calls on stakeholders within the downstream sector to help the administration of the NNPC Retail Ltd and the Dangote refinery to maintain the petroleum merchandise provide.”
The newest growth concludes a number of months of negotiations between each events and is anticipated to extend effectivity, affordability, and financial progress.
The Dangote refinery, the biggest in Africa and Europe, has already commenced the manufacturing of petrol, diesel, and aviation gas, with plans to produce merchandise to over 30,000 IPMAN members and 150,000 stores nationwide.
This transfer is anticipated to remove middlemen, scale back prices, and guarantee a gentle provide.
P’Harcourt refinery exports
Saturday PUNCH additionally gathered on Friday that the newly rehabilitated Port Harcourt refinery had commenced the exportation of refined petroleum merchandise, promoting its first cargo of low sulphur straight-run gas oil to Dubai-based Gulf Transport and Buying and selling Restricted.
A report by Kpler, a knowledge and evaluation firm, said that the refinery began up its Coolant Distribution Unit 1 this week, with its estimates pinning operations at 20,000 barrels per day.
It said that the 60,000bpd facility, at the moment working at 70 per cent capability, bought its first low sulphur straight run gas oil cargo, pointing to a gradual and phased start-up of operations.
The ship will load 15,000 metric tons of the product, which interprets to about 13.6m litres.
The report mentioned, “Port Harcourt bought its first LSSR cargo, with a sulphur content material of 0.26 per cent wt and a 0.918 g/ml density at 15°C, to Dubai-based Gulf Transport & Buying and selling Restricted. Loading onboard the Marvel Star MR1 within the coming days. The 15,000 metric tonnes cargo, bought at a $8.50/t low cost to the NWE 0.5 per cent benchmark on an FOB foundation.”
Whereas it will have a restricted impression on world VLSFO benchmarks for now, the newest growth adjustments market realities for Atlantic Basin exporters of fresh merchandise into Nigeria and the broader area.
Kpler reported that the event would assist displace imports from conventional suppliers in Africa and Europe, as Nigeria’s falling clear product imports are already lowering, dragging imports into the broader West Africa area decrease as properly.
It added that the LSSR was produced from the 60,000 bpd part of the refurbished Port Harcourt refinery following a November 26 announcement that it had started processing crude oil.
“LSSR manufacturing from this prepare is anticipated to regular at about 60,000 metric tonnes per 30 days over the close to time period. The bigger 150,000 bpd part of the refinery, nevertheless, stays offline and can begin up after manufacturing from the primary section stabilises,” it famous.
Persevering with, the report mentioned a possible ramp-up to full capability of 210,000 bpd would weigh on gas imports to the nation after Dangote’s rising refinery runs already pressured gasoline imports to multi-year lows since October.
NNPC said on November 26 that CDU 1 at Port Harcourt had began operations, additionally claiming that product exports through vans had commenced.
Kpler’s in-house crude shares knowledge corroborates that take a look at runs have been ongoing, with PPMC inventories dropping from 1.5m barrels in August to 1.3Mbbls in October to round 1Mbbls in November (present crude inventories would allow refinery runs of round 30 for one month).
“Whereas CDU 1 has a nameplate capability of 60,000 bpd, we estimate the unit to solely run round 20,000 bpd for the remainder of the yr, doubtlessly reaching full capability in Q3 2025, contributing to whole Nigerian crude runs of 420,000 bpd in September 2025.
“Port Harcourt’s second CDU may begin take a look at runs in late 2025, pushing the refinery’s crude consumption to 150,000 bpd in December 2026 and whole Nigerian throughput to above 700 kbd.
“As a easy refinery (NCI 4.8) with one 60,000 bpd CDU, 6 kbd Reformer and with out an operational FCC (of which we anticipate the ramp up in late Q3 2025), we estimate that Port Harcourt’s product output might be primarily gasoline, straight run gasoil and gas oil.
“This suggests that by This fall 2025, the plant may provide some 24,000 bpd gas oil, 15,000 bpd gasoline, 15,000 bpd diesel, 6,000 bpd jet, and a few minor volumes of LPG. If CDU 2 have been to completely begin up, transferring capability to 210,000 bpd and together with all secondary models (which we don’t anticipate earlier than Q2 2026), product output may theoretically transfer to 82,000 bpd gasoline, 78,000 bpd diesel, 20,000 bpd jet and 18,000 bpd residue (gas oil, bitumen, slurry).
“We mission Port Harcourt to run nearly fully on Nigerian crude grades as it’s owned by NNPC and we anticipate many of the gas volumes to be consumed by the home market and solely gas oil output contributing to product exports,” It famous.
Efforts to get feedback from the nationwide oil agency on the event proved abortive because the NNPCL spokesperson, Femi Soneye, didn’t reply to enquiries.
Operators react
Business gamers within the downstream oil sector questioned how the Port Harcourt refinery may begin exporting merchandise when there had been issues about its manufacturing capability.
“This cargo is a ploy to make individuals consider that what they’ve arrange in Eleme is a refinery. However what they’ll do is transship that cargo to Central Europe and ship it again to Nigeria,” a significant vendor within the business who spoke in confidence attributable to lack of authorisation to talk on the matter, said.
One other operator within the midstream arm of the sector mentioned, “It’s stunning to listen to that the plant has began exporting refined merchandise. It’s producing at 70 per cent capability and the a part of that refinery that’s working is the 60,000 bpd facility.
“So, what amount of merchandise is it truly exporting, and does it have that capability to export something now? The refinery solely began operations barely two weeks in the past.”
In the meantime, native operations are choosing up on the Port Harcourt refinery as extra vans have begun lifting petrol.
A drive from Port Harcourt to the refinery positioned in Alesa in Eleme Native Authorities Space of Rivers State takes almost one hour, no due to the deplorable Akpajo-Onne part of the East-West highway.
Nonetheless, when there’s gridlock, as is the case generally, one might spend between two to a few hours attempting to meander out of the visitors.
The previous Port Harcourt refinery, inbuilt 1963, has been in a comatose state for over seven years however got here alive final week when the Group Chief Government Officer of NNPCL, Mele Kyari, unveiled a brand new plant on the refinery.
This signalled the graduation of operations there though many Nigerians acquired the information with a pinch of salt.
Although precise loading of merchandise occurred beneath the supervision of the NNPCL Group CEO, the information which filtered out the identical day that over 200 vans lifted petrol was discovered to be false because the variety of vans that lifted petrol was lower than 10.
After Kyari’s departure, it was gathered that operations have been scaled down attributable to some additional improve of services that occurred equivalent to calibration, coupled with de-watering of the previous inventory which needed to be emptied to pave the way in which for newly refined merchandise.
Although the refinery loading arms are numbered one to 18, the Terminal Supervisor of Port Harcourt Depot, Chike Joel, whereas conducting newsmen on a tour of the refinery led by the Managing Director, Ibrahim Onoja, final week, mentioned the depot operates with 15 useful arms contained in the loading bay however with solely three at the moment in use attributable to their functionality of loading three vans in quarter-hour.
“Should you give us 100 vans at this time we are able to evacuate them in lower than 5 hours,” Joel added.
Nonetheless, findings by one in every of our correspondents revealed that all through final week, lower than 20 vans lifted merchandise from the newly commissioned facility as de-watering and calibration occurred.
Nonetheless, within the latter a part of this week, there was a marked enchancment in actions on the refinery as about 11 vans lifted merchandise on Wednesday.
Our correspondent, who visited the depot on Thursday, experiences that some vans that lifted merchandise late on Wednesday have been ready for his or her waybill, whereas extra vans began coming in after being cleared.
Successfully on Thursday, 19 vans of 45,000 litres capability every lifted petrol with the primary loading at precisely 1.04 pm taking about 45 minutes to load one truck from the loading bay. A fireplace service truck drove in at precisely 1.23 pm and was stationed close to the loading bay.
Whereas six vans strolled in on the primary batch, a complete of 19 vans lifted petrol as of 6pm when loading stopped.
In the meantime, solely mega entrepreneurs (the NNPC and OandO) are loading PMS on the refinery as impartial entrepreneurs have but to patronise the ability attributable to pricing points.
Truck drivers and different stakeholders confirmed to our correspondent that solely petrol is at the moment being distributed.