Nigeria’s new Ondo refinery project sees breakthrough following the creation of JV structure

A new project to construct a 500,000 barrels per day (bpd) refinery in Nigeria’s Ondo State has been formalised, with a joint venture (JV) structure established to carry the plans forward.

The companies expected to realise the project include Backbone Infrastructure Nigeria Ltd., which initiated the plans, NEFEX Holdings Limited of Canada, a company with significant experience across the Middle East, Europe, and North America, and the newest member – Sunshine Joint Venture Infrastructure Ltd., which will take charge of the project’s execution, according to ASM.

The announcement was made in Abuja on December 8, where concerns regarding the $50bn project’s new commitments, location, and expected milestones were discussed.

According to the JV partners, the new structure will enable them to construct a refinery of this size while remaining in line with the requirements set out by the Ondo State Government. The state has already cleared land within its free trade zone for the project, and has been involved in its development since the start – guiding the project on regulation, land tenure, and access to coastal logistics.

Upon completion, the plant is expected to be one of Africa’s largest private industrial projects and would be second to Aliko Dangote’s $20bn 650,000 bpd Dangote refinery located in Lagos. The new project’s expected capacity of 500,000 bpd puts it ahead of numerous neighbours and would boost Nigeria’s output significantly, with the continent’s next largest refiner, South Africa, only being able to host refineries that sit at around 100,000-180,000 bpd in comparison.

Such a development would likely change trading dynamics across the continent again and would make a noticeable dent in minimising fuel imports, an issue that remains prominent across many African nations.

For Nigeria itself, a new 500,000 bpd plant could help minimise the effects of its dormant state-owned refineries, which have struggled to get back online despite years of rehabilitation works. It would also allow for a stronger dynamic with Dangote refinery, making sure the country does not rely solely on one plant for its refining future.