TECHNOECONOMIC ANALYSIS OF REFINING NIGERIAN LIQUEFIED NATURAL GAS CONDENSATE

Abstract

Condensate refining is among the strategies proposed to solve the light oil glut around the globe. The Nigerian Liquefied Natural Gas (NLNG), which is the Nigerian government’s best performing investment in the natural gas value chain, produces plant condensate as a by-product. In this paper, the economics of a refinery designed to use NLNG plant condensate is evaluated under an optimistic oil price forecast and a pessimistic oil price trend. A gasoline producing refinery configuration was chosen for this study, and it comprises of a naphtha splitter, a Penex isomerisation unit and a Continuous Catalytic Reforming (CCR) unit. The product yields and plant costs were determined by established correlations and industry estimates. The proposed refinery will convert 40,000 bpd plant condensate into 96% gasoline, 3% LPG and 1% hydrogen, and economic indicators such as Net Present Value (NPV), Internal Rate of Return (IRR) and Profitability Index (PI) were used to assess the economic viability of the refinery. The optimistic scenario of oil price forecast resulted in an NPV of $ 531.90 million, an IRR of 20.09% and a PI of 3.16, while the pessimistic scenario gave an NPV of $16.26 million, an IRR of 11.16% and a PI of 1.07. These results prove that a condensate refinery with the proposed configuration is economically feasible and interested investors in Nigeria’s refining space should explore this possibility.