Petrolex Group, an indigenous oil and gas company said it will spend about USD3 billion to construct a petroleum refinery in Ogun state, South West Nigeria.
The company said it is investing to create ePetrolex Mega Oil City to increase the availability of refined petroleum products.
The coming of Petrolex into the refining sector will be a competition to Dangote Refinery, a project planned to be delivered in 2019.
Nigeria has been faced with an inadequate supply of petroleum products which has put the country into series of oil swap agreements with international energy firms to import petroleum products back into the country.
Petrolex might not pose a big competition to Dangote Refinery as the refinery is said to deliver 100,000 barrels per day when completed. According to estimates from PwC, Dangote refinery will deliver 650,000 bpd when it opens for business by mid-2019.
Operating at 50% utilisation, existing refineries (445,000 bpd) are operating at 20% utilization and modular refineries (combined capacity of 200,000 bpd) also come onstream early 2019, operating at 90% utilization.
As to where Petrolex will get the funds to finance such projects, the company said it will fund the project with debt instruments and its revenue from the midstream sector of the oil industry.