Nigeria will be the growth engine of the refining industry in the Middle East and Africa between 2018 and 2022, as the country is set to add the most planned refining capacity among all countries in the two regions during the forecast period, according to leading data and analytics company GlobalData.
The company's report: ‘Refining Industry Outlook in Middle East and Africa to 2022' states that in 2018, the Middle East and Africa will account for 42.6% of the total global refining capacity. The total refining capacity in the region is expected to increase from 15.5 million barrels per day (mmbd) in 2018 to 21.7 mmbd in 2022. The region is also expected to have an estimated new build capital expenditure (capex) spending of US$215.3bn, of which roughly 25% will be spent by Nigeria during the outlook period.
Nigeria will lead in terms of refining capacity additions and new build capex spending by 2022. The country has planned investment of around US$54.8bn for refining capacity additions of 1,933 thousand barrels per day (mbd) by 2022. The country's oil refining capacity is expected to increase from 446 mbd in 2017 to 2,572 mbd in 2022 at an Average Annual Growth rate (AAGR) of 35%.
Soorya Tejomoortula, Oil & Gas Analyst at GlobalData, explains: “Nigeria is increasing its crude oil refining capacity as it aims to become a net exporter of petroleum products, instead of being a mere net exporter of crude oil. The increase in refining capacity will also help the country to meet growing domestic consumption of petroleum products.”
GlobalData identifies Iran as the second highest in the Middle East and Africa in terms of refining capacity additions. The country will add around 1,232 mbd of refining capacity by 2022, which will increase the country's total refining capacity to 3,545 mbd. A planned investment of US$15.9bn is expected to be spent on the new build projects, during the outlook period.
Tejomoortula adds: “Iran is planning to increase its crude oil refining capacity as its focuses to meet growing domestic fuel demand and reduce imports. The country is also aiming to become a significant exporter of petroleum products.”
Iraq is the third highest contributor to the refinery capacity growth in the Middle East and Africa. The country's refining capacity will increase by 780 mbd, from 1,296 mbd in 2018 to 2,076 mbd in 2022. Iran is also the second highest capex spender in the Middle East and Africa with an estimated capex spending of US$37.9bn for refining capacity additions.
Among the upcoming refineries in the region, Lagos I in Nigeria has the highest refining capacity of 650 mbd in 2022. Al-Zour in Kuwait and Siraf in Iran follow with capacities of 615 mbd and 480 mbd respectively.
In terms of capex, Yanbu IV in Saudi Arabia leads with capex of US$15bn during the period 2018 to 2022, followed by Tabi in Angola and Mthombo in South Africa with capex of US$10.5bnand US$10bn, respectively.
Information based on GlobalData's report: Refining Industry Outlook in Middle East and Africa to 2022 – Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Refineries