Recently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, in a town-hall meeting with the management and staff of the Kaduna Refining and Petrochemicals Company (KRPC) Kaduna, stressed that efforts were ongoing to explore the possibility of piping crude oil from Niger Republic to be refined in KRPC. He added that President Muhammadu Buhari was personally committed to the project.
He told workers that it was important to explore alternative crude supply to the KRPC, which has been affected by pipelines vandalisation. He assured that the initiative would reduce the downtime of the plant and ensure optimal utilization.
Dr. Baru said, “Due to challenges with the aged refinery and crude oil pipelines that had been breached severally, the operations of the refinery has been epileptic. This we are determined to resolve through various intervention methods, including the evaluation of alternative crude oil supply from Niger Republic through building pipelines of over 1,000 kilometers from Agadem to Kaduna. That effort is being championed by Mr. President himself.” According to him, the corporation has already started engagements with the Nigerien minister of petroleum and the Chinese that are operating the field at Agadem.
Nigerian oil marketers operating in the north are already patronizing Niger refinery. The Soraz Refinery, located at Zinder in Niger Republic, is fast becoming a hub. This is because of its proximity and ease of doing business, as well as profitable returns on investment. The 20,000 barrels per day (bpd) refinery is patronized by Nigerians, mainly for its twin products of diesel (AGO) and cooking gas (LPG). The refinery is about 200 kilometres from the Nigerian border of Kwangolam in Mai’adua Local Government Area of Katsina State.
Some of the major marketers cleared by the Department of Petroleum Resources (DPR) for the business included Rixon Energy; Safari Petroleum; Kjewel Gas and Petroleum; Himma Merchants; Whanu limited; One Ten Gas Limited; Bokir International Limited; Micpo Plc; A. A. Rano and AYM Shafa.
On a visit to the border, one would be greeted with numerous trucks waiting to move in or return from the refinery and head to their various destinations. Inquiries at the border, showed that an average of 165 trucks load daily at the refinery, out of which more than 130 come to Nigeria through Kwangolam. Out of this number, A.A Rano has the highest number of freight across the border, with an average of 30 trucks daily.
It was estimated that about 300 tonnes of cooking gas are imported from the refinery on a weekly basis. Despite the depreciation of the naira, business still booms at the refinery. And despite paying more than what they paid in the past, marketers still believe that Soraz is the place to patronize.
EnergyNewsTM findings reveal that the wholesale price of diesel was N168 per litre in Niger last month (November). Every month, the price fluctuates, depending on transaction worldwide. A price template is issued every month in Niger. However, diesel sells between N190 to N200 in most Nigerian outlets. Cooking gas is N150 per kilogram in Niger Republic while it sells at N250 per kilogram in Nigeria. These two commodities are the most sought after from Soraz since they have been fully deregulated in the Nigerian market.
The recent decision by the federal government to construct 1000 kilometres of pipeline from Agadem, Diffa State in Niger Republic, has elicited mixed reactions from stakeholders, especially those at the border who are making a living out of the business. For Bashir Himma of Himma Merchants, it is a good idea since one of the main reasons that forced him and others to Niger is its closeness. According to him, they prefer to patronise the place instead of going to Lagos and Port Harcourt. “If you also take a look at the terrain, it is flat, solid and more secure, so we worry less about the state of our trucks. And there’s less fuel consumption when lifting the commodity. It saves a lot for business,’’ he said.
Himma further said that the cost of transporting petroleum products from the southern part of Nigeria to the North was discouraging. “A truck consumes about 300 litres of diesel for a trip from Kano to Soraz, but a trip to Lagos, Calabar, Port Harcourt or any depot in the South will cost at least 1, 200 litres.’’ He said if the pipeline was constructed as planned, government would have less trouble moving the product to Kaduna refinery. “We were also made to understand that since the Kaduna refinery was built for heavy crude grade as that of Venezuela, which is similar to that of Niger with high sulphur, it would be good,’’ he added.
In a related development, Kaduna State has signed an MoU for the Development of a Greenfield Refinery with a consortium of Chinese investors.The proposed 80,000-barrels per day Refinery comes with an Integrated Pipeline to supply Crude from Oil Wells in the Republic of Niger. The Investment Partners are CNPC-Tianjin, Chongqing Construction, Tianjin Energy Resources, and Alpha Global.