The major challenge with the [base oil] plant is that for some years now the import berth platform at Escravos has been out due to vandalism, Alegbe told Lube Report, referring to the berth at a Chevron terminal on the Escravos River delta. The refinery in the northern city of Kaduna receives crude via nearly 700 kilometers of pipeline starting at the Escravos berth. That is the only facility through which we can receive foreign crude, the feedstock for the plant. Chevron has, however, been given a marching order to fix it as soon as possible. So even upon completion of the [refinery] rehabilitation – if that [Escravos] facility is not available, and we are not able to import foreign crude, then the production of [base oil] will not be possible.

The Kaduna refinery has Nigerias only base oil plant. In the past, its production capacity was reported to be about 112,000 metric tons per year.

Operations of the Kaduna refinery have been disrupted much of the past decade and a half due to vandalism at various points along the pipelines. At the same time, significant parts of the refinery fell into disrepair or became obsolete, so NNPC has engaged in a two-pronged effort to repair and protect the pipelines while repairing and upgrading the refinery.

Under the fuel section, the crude distillation unit, the naphtha hydrating unit, the fluid catalytic cracking unit (FCC), the basic four components of the fuel section – there is no heat exchanger that we have not fixed, cleaned and re-bundled, or replaced, said Saidu Muhammad, managing director of KRPC. He confirmed that the repairs and improvements would allow the base oil plant to resume operation.

Nigerian blenders said this would help the lubricant industry here.

We spend billions [of naira] in the importation of base oils annually, so the moment they start producing it will do the sector a whole world of good for our members, said Emeka Obidke, executive secretary of Lubricant Producers Association of Nigeria.

KRPC has not started producing base oils for now because the two fluid catalytic cracking units – which are the units designed to produce base oils – are all part of the units expected to be revived in the recently signed turnaround maintenance contract, said Emmanuel Ekpenyong, head of lubricants for Honeywell Oil and Gas Ltd. in Lagos. Once the FCC units of the KRPC come back to life, there would definitely be a breath of fresh air in lubricant manufacturing in Nigeria.

No one expects Kaduna to satisfy all of the nations base oil needs, though. Ekpenyong emphasized that the total installed capacity of KRPC is far below the base oil demand of Nigeria. Thus Nigerian base oil traders and blenders may still need to import to take care of the shortfall, he said.

Ekpenyong noted that there are two fluid catalytic cracking units at KRPC – one for Bonny light Nigerian crude and the other unit for refining of heavy crude, mostly from Venezuela.

It is noteworthy that the two units – even when they were functioning optimally – could only produce light neutrals – solvent neutral 100, SN150, SN250 and SN500, he said. Thus Nigeria may still have to import heavy base oils like SN900 and bright stock even if KRPC is resuscitated.

Ekpenyong agreed that if the KRPC starts producing base oil again, base oil prices, especially the light solvent neutrals, will plummet in the long run. Recall that due to the recent devaluation of the local currency, Nigerian blenders never enjoyed the drop in the international prices of petroleum distillates, including base oils. This drop in base oil prices will also increase profitability for local blenders and increase capacity utilization of blending plants in Nigeria, most of which hover around 35 percent, he added.