The chairman/chief executive officer (CEO) of Waltersmith Modular Refining and Petrochemical Company Limited, Abdulrazaq Isa has assured that the 5,000 barrel per day (BPD) Modular Refinery located on its Ibigwe Flowstation, in Ohaji Egbema local government area of Imo State would be completed in the next 18 months.
Speaking at the ground breaking ceremony yesterday, the CEO disclosed that the refinery was conceptualized in 2011 with the intent to mitigate the frequent outage of the third-party export Trans Niger Pipeline (TNP) and to optimise the full value of the nation’s crude oil production through in-country refining and providing petroleum products for the domestic market.
According to him, the refinery when completed would help meet the petroleum products needs of its immediate operating environment of Imo and Anambra states.
Speaking on how the refinery will work, the CEO said, his company, which currently operates the Ibigwe Field (OPL 2004) would henceforth refine its 7,000bpd oil locally instead of exporting the crude.
He stated that this position would allow the modular refinery to enjoy uninterrupted refining of crude oil from its upstream business all year round.
“By so doing, Waltersmith will be in a position to contribute about 271 million litres of refined products (Diesel, Kerosene, HPFO and Naphta) annually to the Nigerian economy, serves as an import substitution for meeting domestic demand for products, create both direct and indirect employment as well as reduce the demand for foreign exchange from the country’s treasury to import these products,” he said. Speaking on how he intends to grow the company further, he said, “The 5,000 bpd refinery which we are breaking ground today is the first phase of a much larger development. Ultimately, we plan to increase capacity to 30,000bpd to process additional products including Petrol (PMS) and Jet Fuel.
“We have already executed an MoU with PCC of China towards the installation of the additional capacity within three years, after startup of the 5,000 bdp modular refinery in December 2020.”
“To ensure the security of crude supplies for that level of refining capacity, it is our intention to either acquire additional assets within 30km radius of this site or partner with assets owners to secure sustainable crude feedstock for the expanded refinery. We have no doubt we will receive the much-needed support from the federal government, NNPC, DPR and all stakeholders as the development expansion evolves,” he explained.
On plans to transform the company into an integrated energy entity, he said, “Waltersmith is also developing a 30 megawatt gas-fired power plant for which the Nigerian Electricity Regulatory Commission (NERC) has granted a power generation licence in 2017. The plant will be situated in the same energy industrial estate complex as the refinery and the flow station in the Ibegwe marginal field. “The power plant will utilize processed gas from Waltersmith’s Ibigwe marginal field and from third parties operating gas fields that are within proximity to the Ibigwe field. The power generated will be supplied to the national grid and is expected to contribute towards bridging the power supply gap in the country and create both direct and indirect jobs during the construction and operational phases.” According to him about 118,000 households and 27,000 commercial/industrial users are expected to be powered through the project.
Commending the company for activating its Modular Refinery Licences, the minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, warned investors who obtained licences to set up modular refineries but failed to do so that they run the risk of losing it if they fail to utilise them by building refineries.
“The federal government is contemplating on revoking the licences of those who were issued licences to operate modular refineries years ago but failed to utilize them,” he said.
Speaking on other policies aimed at turning around the downstream sector of the nation’s oil and gas industry, Kachikwu charged all companies carrying out exploration of crude oil in the country especially the multinationals to start thinking of setting up refineries in the country as a new policy that will compel them to refine 50 per cent of crude extracted locally.
He stated that the time has come for the country to change its policy as it concerns crude oil exploration.“The time has come to begin to process not just export crude oil, ultimately a policy that will compel companies operating in the country to refine a portion of their product in country will have to be enacted,” he added. He noted that investors who are willing to invest in refinery are complaining of how they can get crude oil to refine. “One of the challenges the investors who are ready to build refineries in the country are facing is how to find crude,” Kachikwu stated.
“But in the next couple of months things will begin to change, we have to begin to proceed to 20 per cent local production then to 50 per cent over the next five years. Otherwise we are just going to stay consistently exporting rather than processing it to add value and create employment,” he said. The Waltersmith Modular Refinery is funded through a shareholders agreement (SHA) executed with the Nigerian Content Development and Monitoring Board (NCDMB), in June 2018, which gives the board 30 per cent equity investment, as well as debt facility agreement obtained from Africa Finance Corporation (AFC) in July 2018.
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