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The Petroleum Products Retail Outlets Owners Association has made arrangements with Dangote Petroleum Refinery to directly lift petroleum products for distribution to PETROAN members' depots and retail outlets across the country.
Petron made the announcement on Saturday as the Port Harcourt Refining Company has reportedly started exporting low sulfur straight fuel oil with its first shipment to Dubai, United Arab Emirates.
However, industry operators have expressed diverse views about the reported exports following concerns about refinery output since the start of operations.
PHRC officially commenced operations on Tuesday, November 26, 2024, following a series of postponements of its resumption dates by its managers – Nigerian National Petroleum Company Limited.
On Friday, PETROAN in a statement issued by its National Public Relations Officer, Dr Joseph Obele, announced that the fuel retailers have struck a deal with the $20 billion Lekki-based plant to source product from the Dangote Refinery after several negotiations.
It said the agreement, which comes about a month after the Independent Petroleum Marketers Association of Nigeria secured the first offtaking approval, guarantees the availability of petroleum products during the upcoming Yuletide season.
Obele said the agreement was reached during a meeting with officials of the Dangote Refinery on Monday, December 2, 2024.
He said the association has reached a consensus on the monthly volume reserved for PetroN, payment modalities and favorable pricing rates.
The statement read, “The National Chairman of Petroun, Dr. Billy Gillis-Harry, led Petroun’s negotiating team into a productive strategic business meeting with the management of the Dangote Refinery at the Complex in Lagos on Monday, December 2, 2024.
“Petroan is impressed with the outcome of the strategic business meeting, as evidenced by the establishment of seller-buyer relationship, reservation of monthly volumes for Petroan, payment modalities and favorable rates.
“The sealing of a transaction deal with Dangote Refinery was the result of the agreement achieved by Petrowan in a successful buyer-seller negotiation and strategic meeting.”
Petroun further said it was within its rights not to disclose complex details of the deal, but expressed hope that the general public would be the biggest beneficiary.
It added, “We reserve the right not to make public the terms and conditions of the trade, even though we express optimism that the biggest beneficiary will be the general public as it relates to product availability and affordability.”
Continuing, the statement said, “Petroan’s National Headquarters, Abuja expresses confidence that the measures taken by the Association following the commencement of production at the Port Harcourt Refinery and the fruitful discussions with the management of the Dangote Refinery fueled by There will be disruption in supply. Shortage during and after the festival season.
“Petroen rejects concerns of any fuel shortage and cautions against panic buying as keeping stock of petroleum products at home is unsafe and dangerous. Petrowan also calls on downstream sector stakeholders to support the management of NNPC Retail Limited and Dangote Refinery to maintain the supply of petroleum products.
The latest development concludes several months of negotiations between the two parties and is expected to increase efficiency, affordability and economic growth.
The Dangote Refinery, the largest in Africa and Europe, has already begun production of petrol, diesel and aviation fuel, with plans to supply products to over 30,000 IPMAN members and 150,000 retail outlets across the country.
The move is expected to eliminate middlemen, reduce costs and ensure stable supply.
P'Harcourt Refinery Export
saturday punch It was also revealed on Friday that the newly rehabilitated Port Harcourt Refinery has started exporting refined petroleum products, having sold its first cargo of low sulfur straight running fuel oil to Dubai-based Gulf Transport and Trading Limited.
A report from Kpler, a data and analytics company, said the refinery this week started its Coolant Distribution Unit 1, which is estimated to be operating at 20,000 barrels per day.
It said the 60,000 bpd facility, which is currently operating at 70 percent capacity, sold its first low sulfur straight-run fuel oil cargo, pointing to a gradual and phased start-up of operations.
The ship will load 15,000 metric tons of product, which is approximately 13.6m litres.
“Port Harcourt sold its first LSSR cargo, with a sulfur content of 0.26 per cent wt and a density of 0.918 g/ml at 15°C, to Dubai-based Gulf Transport and Trading Ltd,” the report said. Wonder Star MR1 will be loaded onto the ship in the coming days. The 15,000 metric tonne cargo was sold at a discount of $8.50 per tonne to NWE benchmark on FOB basis by 0.5 per cent.
While this will have limited impact on global VLSFO benchmarks for now, the latest development changes the market realities for Atlantic Basin exporters of clean products in Nigeria and the wider region.
Keppler noted that the development will help displace imports from traditional suppliers in Africa and Europe, as Nigeria's declining clean product imports are already reducing imports into the broader West Africa region.
It said the LSSR was produced from a 60,000 bpd section of the refurbished Port Harcourt refinery following the November 26 announcement that it had started processing crude.
“LSSR production from this train is expected to remain stable at around 60,000 MT per month in the near term. “However, the larger 150,000 bpd section of the refinery is offline and production from the first phase will commence once it is stabilised,” it noted.
Continuing, the report said a potential ramp-up to full capacity of 210,000 bpd will impact fuel imports into the country, as Dangote's growing refinery is already pushing gasoline imports to multi-year lows since October. Is putting pressure.
NNPC said on 26 November that CDU 1 in Port Harcourt had commenced operations, adding that product export via trucks had begun.
Kpler's in-house crude stock data confirms that as test runs continue, PPMC inventories have declined from 1.5 million barrels in August to 1.3 MBbbl in October to about 1 MBbbl in November (existing crude inventory for one month Will be able to run a refinery of about 30).
“While the nameplate capacity of CDU 1 is 60,000 bpd, we estimate the unit will run only around 20,000 bpd for the remainder of the year, potentially reaching full capacity in the third quarter of 2025, bringing the Nigerian total to 420,000 bpd in September 2025. Will contribute to crude run.
“Port Harcourt's second CDU may commence testing in late 2025, taking the refinery's crude oil intake to 150,000 bpd in December 2026 and total Nigerian throughput above 700 kbd.
“As a simple refinery (NCI 4.8) with a 60,000 bpd CDU, 6 kbd reformers and without an operational FCC (of which we expect ramp up in late 3Q2025), we estimate that Port Harcourt The product output will mainly be gasoline, straight run gasoil and fuel oil.
“This implies that by Q4 2025, the plant can supply approximately 24,000 bpd of fuel oil, 15,000 bpd of gasoline, 15,000 bpd of diesel, 6,000 bpd of jet and some nominal quantities of LPG. If CDU 2 becomes fully operational, capacity increases to 210,000 bpd and including all secondary units (which we do not expect before the second quarter of 2026), product production will theoretically reach 82,000 bpd of gasoline. , 78,000 bpd diesel, 20,000 bpd jet and can expand to 18,000. BPD residues (fuel oil, bitumen, slurry).
“We anticipate Port Harcourt to run almost entirely on Nigerian crude grades as it is owned by NNPC and we expect most of the fuel volumes to be consumed by the domestic market and only fuel oil production will contribute to product exports ,” it noted.
Efforts to obtain comments from the national oil company on the development proved unsuccessful as NNPCL spokesperson Femi Soni did not respond to enquiries.
operators react
Industry players in the downstream oil sector wondered how the Port Harcourt refinery could start exporting products when there were concerns about its production capacity.
“This is a ploy to make the cargo people believe that what they have established in Eleme is a refinery. But what they will do is transfer that cargo to Central Europe and send it back to Nigeria,” a leading dealer in the industry said, speaking in confidence due to lack of authorization to speak on the matter.
Another operator in the midstream branch of the sector said, “It is surprising to hear that the plant has started exporting refined products. It is producing at 70 percent capacity and the part of the refinery that is operating is a 60,000 bpd facility.
“So, what volume of products is it actually exporting, and does it have the capacity to export anything now? The refinery started operations barely two weeks ago.
Meanwhile, local operations at the Port Harcourt refinery are picking up as more trucks have started picking up petrol.
It takes about an hour to drive from Port Harcourt to the refinery located at Alesa in Eleme Local Government Area of Rivers State, thanks to the poor Akpajo-Onye section of the east-west road.
However, when there is a traffic jam, as it sometimes happens, it can take two to three hours for a person to get out of the traffic.
The old Port Harcourt refinery, built in 1963, has been dormant for over seven years but came alive last week when the Group Chief Executive Officer of NNPCL, Mele Kyari, unveiled a new plant at the refinery.
This signaled the commencement of operations there, although many Nigerians took the news with a pinch of salt.
Although the actual loading of the products took place under the supervision of the NNPCL Group CEO, the news that leaked on the same day that more than 200 trucks lifted the petrol was found to be false as the number of trucks lifting the petrol was less than 10.
Following Kyrie's departure, it was discovered that operations had been reduced due to some further upgrades to the facilities, such as calibration, combined with de-watering of old stock that had to be carried out to pave the way for new refined products. Had to evacuate.
Although the number of refinery loading arms ranges from one to 18, the Terminal Manager of the Port Harcourt depot, Chike Joel, while conducting journalists on a tour of the refinery led by the Managing Director, Ibrahim Onoja last week, said the depot operated with 15 functional It happens. Weapons inside the loading bay, but only three are currently in use due to the ability to load three trucks in 15 minutes.
“If you give us 100 trucks today we can get them out in less than five hours,” Joel said.
However, findings by one of our correspondents revealed that over the past week, less than 20 trucks picked up products from the newly commissioned facility due to de-watering and calibration.
However, late in the week, there was a notable improvement in activity at the refinery as about 11 trucks picked up products on Wednesday.
Our correspondent, who visited the depot on Thursday, said that some of the trucks that picked up the products were waiting for their waybills late on Wednesday night, while more trucks started arriving after getting the approval.
Effectively on Thursday, 19 trucks with 45,000 liter capacity picked up petrol with the first loading at 1.04 pm, taking about 45 minutes to load one truck from the loading bay. At exactly 1.23 a.m. a fire service truck arrived and was parked near the loading bay.
While six trucks arrived in the first batch, a total of 19 trucks picked up petrol by 6 pm when the loading stopped.
Meanwhile, only mega marketers (NNPC and O&O) are loading PMS at the refinery as independent marketers are yet to patronize the facility due to pricing issues.
Truck drivers and other stakeholders confirmed to our correspondent that currently only petrol is being distributed.
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