Many companies are now floating modular refineries in Nigeria – and it’s shaping up to be a big positive for the energy sector and the Nigerian economy. MARK ITSIBOR reports
For decades, fuel scarcity and high cost of it have made Nigerian about the world’s worse country for economic gravity despite the massive availability of crude oil in the country. Economic expansion and improved welfare for the people have been knocked down by lack of the will or deliberate effort to refine the product in full commercial quantity for the domestic market. And so, Nigeria has had to largely depend on imported refined fuel products for the economy to function – not to its full potentials. The four existing government moribund refineries could not solve the problem. They currently perform much below the 480, 000 barrels they are built to refine daily.
But now, there is a deliberate effort to change the ugly tide. Federal government has granted license to new refining companies, with a promise to introduce modular refinery for two reasons: as a way of substituting the activities of the illegal refineries and to also increase our local production.
About 6000 barrels of oil per day are expected to be added to the current daily production and another 300 Megawatts of power to the nation’s energy capacity with the entrance of new modular refining plants. At the last count, the federal government had given license to over 23 modular refineries.
And the modular refineries’ collective economic might, measured in real output on a production-capacity- parity basis, are now coming upstream as rescue.
Crown Refinery and Petrochemical Limited — a privately owned company whose core business is into refining of crude oil into premium petroleum products is one of the refining companies that have made impactful inroad into the industry lately. The oil firm recently entered into a Memorandum of Understanding (MOU) with the Ondo state government to build a $500million refining plant in the state. It is designed to process both imported paraffinic and Nigerian crude into finished petroleum products, oils and lubricants.
The plant is designed for an initial production capacity of 30,000 Barrels per day. Located in Eruna Ogboti community of the state, the refinery is expected to increase its crude oil refining capacity to 60,000bpd when it commences full operation within its first five years of operating. It is expected to be completed within 36 months from the day of the signing of the MoU, which took place yesterday at the Governor’s Office in Akure.
The refinery is designed to process both imported paraffinic and Nigerian crude into finished petroleum products, oils and lubricants.
According to the CEO of Crown Refinery and Petrochemical limited Mr. Kassim Adeleke, the project will create a total of 2000 direct and indirect jobs for Nigerians, with much consideration for the host community. That amounts to a reduction in the number of unemployed Nigerians.
“It is expected that the upcoming private refineries, ours included, would be able to meet Nigeria’s need for refined petroleum products,” said Adeleke while speaking on the enormous vacuum left uncovered in the petroleum downstream sector.
“The market is deep enough! For us, it is more of contributing to an industry output that will meet the demand,” Adeleke said when asked how his company would compete successfully in this market, considering the number of like modular refineries springing up in the country.
Nigerian, and West African market’s demand for petroleum products has been on the increase in recent years. This has been largely unmet by the existing supply from refineries in the region. The West African sub-region still imports most of her petroleum products. This is the gap that Crown Refinery & Petrochemical Limited is set up to fill.
The coming of Crown Refinery and Petrochemical limited into Ondo State excites the state government which has reiterated its determination to make Ondo State conducive for all genuine investors willing to partner the state in its industrialisation drive.
Speaking during the courtesy visit to him by the Management of LWE a joint venture of Crown Refinery and Petrochemical limited with its technical partners in his office in Akure, the Ondo State governor, Oluwarotimi Akeredolu, SAN, said his administration was resolutely determined to make Ondo State attractive to willing investors by easing the cost of doing business in the state.
While describing as heartwarming the Memorandum of Understanding between the State Government and Crown Refinery and Petrochemical limited on the construction and management of a Modular Refinery worth over Five Hundred million Dollars, Governor Akeredolu said investible potentials of the state particularly in the southern part where the proposed Refinery could not be quantified.
He said Ondo State is strategically positioned among the Niger Delta States and Lagos State, which is the nation’s economic nerve centre, to make all business minded investors reap bountifully on their investments in the state.
He commended Crown Refinery and Petrochemical limited for coming on board at this time to be a worthy partner with the State Government and assured them and their partners a second to none atmosphere in their business deals in Ondo State.
The joy is that the new refineries will alleviate the national and regional shortages in petroleum products supply and create wealth. For instance, Crown Refinery and Petrochemical Limited will also be providing several infrastructural projects in the sates and would create massive employment opportunities for indigenes of the state.
The vision is to ensure that all the crude oil that is locally produced in Nigeria is refined domestically and exported, so there is a good margin in modular refinery business.
Federal Government subsidy on fuel had increased to N2.4 billion daily since May last year from N774 million in March, 2018, as a result of the high price of crude oil in the international market, according to a Petroleum Products Pricing Regulatory Agency (PPPRA) report.
For investors in the downstream oil sector, Nigeria is a large market with a high demand for petroleum products. For example, there is an estimated local consumption of petroleum products in Nigeria of about 55 million litres per day. Premium Motor Spirit (PMS) and diesel account for 35 million and 12 million litres respectively. Dual Purpose Kerosene (DPK) demand is put at about 8 million litres per day.
It is only expected that with many modular refineries jumping into the fray, Nigeria will soon heed the call by International Monetary Fund (IMF) advice for removal of fuel subsidy which is popularly referred to as landing cost and cost of transportation.
Ekiti Education Will Soon Bounce Back To Reckoning, Says Fayemi
Embrace Social Investments To Eliminate Poverty – Akobundu
Half Of My Cabinet May Be Women, Says Abiodun
Onitsha Inferno: Gov Okowa Condoles Obiano, Victims
45th Birthday: Oyetola, Osun Speaker Shower Encomium On Ooni
PMB Orders Forensic Audit Of NDDC
Obaseki Receives 2019 Hajj Report, Reaffirms Govt’s Policies On Inclusiveness
COVER STORIES18 hours ago
Aisha Buhari Apologises Over Viral Video
COVER STORIES18 hours ago
PMB Slashes Travelling Expenses Of Ministers, DGs, Perm Secs, Others
EDITORIAL18 hours ago
Sex- for- grades Scandal
POLITICS18 hours ago
Bayelsa: APC, PDP And The Return Of Hate Speech
COVER STORIES18 hours ago
Kogi Gov’ship: 45 Political Parties Adopt Bello
NEWS18 hours ago
Nigeria Needs Prayers To Overcome Challenges – Lawan
BUSINESS18 hours ago
Nigeria Ready For 4th Revolution With Over 55 Minerals – Minister
LAW17 hours ago
Govt ‘ll Involve High Political Leadership In OGP Process – Malami