Nigeria is preparing to welcome a major $15 billion investment aimed at expanding its refining capacity with a new oil refinery capable of processing 500,000 barrels per day (bpd).
This project marks a critical step in the country’s efforts to reduce reliance on imported petroleum products and strengthen domestic fuel production.
Backbone Infrastructure Nigeria Limited (BINL) announced plans to develop the refinery in partnership with the Ondo State Government, represented by the Ondo State Development and Investment Promotion Agency (ONDIPA).
The refinery will be located within the Sunshine Industrial Park and Free Trade Zone in Ilaje Local Government Area.
The refinery’s construction will be carried out in phases, with the first phase expected to be completed within 48 months.
Beyond meeting domestic fuel demand, the facility is designed to position Nigeria as a leading exporter of refined petroleum products across West Africa.
BINL’s Vice President for Corporate Services, Mr. Wale Adekola, highlighted the broader economic benefits of the project, stating, “This is a game-changing industrial project that will help reduce Nigeria’s trade deficit, conserve scarce foreign exchange, and boost government revenues.
At the state and local levels, we are confident that it will stimulate job creation and drive economic activity.”
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The BINL refinery represents a bold move in Nigeria’s ongoing drive to localize energy processing, develop industrial hubs, and become a refining powerhouse on the continent.
This announcement arrives as Nigeria’s refining sector faces pressure to improve performance, with the Dangote refinery, the country’s largest, recently beginning phased operations.
According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigeria’s estimated functional refining capacity stood at roughly 974,500 bpd as of May 2025.
However, actual refining output was significantly lower, at 701,692 bpd. This gap is largely due to feedstock shortages, logistical challenges, and underperformance in state-owned refineries, many of which remain under phased rehabilitation.
The Dangote Refinery, which processes 650,000 bpd, accounts for nearly 67% of Nigeria’s functional refining capacity and is widely viewed as a milestone in the country’s pursuit of energy self-sufficiency.
Meanwhile, the three state-owned refineries in Port Harcourt, Warri, and Kaduna contribute minimal output due to ongoing rehabilitation and historically low performance.
Private modular refineries such as Aradel, Waltersmith, and OPAC provide additional support to domestic refining.
If completed on schedule, the BINL refinery could alleviate pressure on the refining sector by expanding domestic capacity, attracting investment to the Free Trade Zone, and generating jobs.
While financing and execution will be crucial to the project’s success, its scale reflects growing confidence in Nigeria’s industrial potential.
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Image Credit: CediRates
