China in a US$23 bln MOU with Nigeria

18-May-10

Nigerian National Petroleum Corporation (NNPC) and China’s State Construction Engineering Corporation (CSCEC) have signed a US$23 billion agreement for the construction of three refineries and a fuel complex in Nigeria. The three new refineries will be built in Bayelsa, Kogi and Lagos states, but a location for the petrochemicals complex construction has yet to be confirmed. The project will add extra refining capacity of 750,000 bpd, and will require financing and credits from Chinese authorities and banks to complete. Militants in the oil-rich Niger Delta region have warned of recommencing attacks if development programs promised by the new President fail. Construction of the new refineries is expected to curtail the influx of refined product imports into Nigeria. Despite being the world’s twelfth largest oil producer and the eighth-largest oil exporter, Nigeria imports about 85% of its fuel needs due to the neglect and botched management of the west African country’s 4 state-owned refineries. Years of unrest has cut Nigeria’s oil production by more than two thirds of its oil capacity.