Modular refineries may not have the scale of conventional refineries, however they are known to often offer some quick wins, writes TUNDE OGUNTOLA.
Waltersmith Refining and Petrochemical Company is a joint venture (JV) between Waltersmith Petroman Oil Limited, a leading independent Nigerian Energy company with 70 per cent equity and the Nigerian Content Development and Monitoring Board, a Federal Government of Nigeria parastatal with 30 per cent equity.
The joint venture is coming amidst the adverse effect of the COVID-19 pandemic and the nation’s concerted effort to revive the economy as well as its refining industry that has languished for years. So far, the nation has commissioned the revamping of four state-owned refineries with a total capacity of 445,000 barrels a day while Africa’s richest person, Aliko Dangote, is also building a plant with a capacity of 650,000 barrels a day that will help cut Nigeria’s $7 billion annual fuel-import Bill.
Nigeria is ranked as the 13th largest crude oil producer in the world according to the US Energy Information Administration database for calendar year 2019 with an average daily output of about two million barrels per day, but the nation over the years lack an effective downstream infrastructure despite high production.
However, to change the narratives Waltersmith Refining and Petrochemical Company was cited in Owerri. The primary aim of Walters Smith is simple, which among other raising hope that the country could one day cut its import of refined products.
The overall impact of these investments by Waltersmith is to create an enabling environment to promote Industrialization and significantly promote Economic and GDP growth.
Current estimates of direct and indirect job creation in this industrial hub during the planning, design, construction and commissioning phases will exponentially grow from an estimate of over 500 jobs in 2020 to over 18,000 jobs by the commissioning of the industrial complex in about 2025.
This will then be followed by an even greater exponential growth in job creation when the manufacturing, commercial, residential and technology innovation hubs go into operation post-2025.
‘’Waltersmith Petroman Oil Limited, a Nigerian independent producer, will open a 5,000-barrel a day capacity modular refinery next month precisely 14 October, 2020. The company which is Nigeria’s first producer from marginal fields, plans to increase output to 30,000 barrels a day in two years,’’ said the chairman of the Refinery, Mr. Abdulrazaq Isa.
Isa said from 14 October, 2020, about 23 trucks will commence the loading of products such as diesel, kerosene, heavy fuel oil and naphtha from the refinery.
According to him: ‘’Waltersmith Petroman was established as an E&P Company in 1996 and successfully acquired the Ibigwe Marginal Field (OML-16) license in 2005 and delivered first oil in 2008.
On the back of this successful entry into the Nigerian oil and gas industry, Waltersmith quickly grew production to over 7,000 barrels of oil per day (bopd), built a 15,000 bopd Flowstation at Ibigwe to process crude from the Ibigwe Field and the neighboring NNPC/SEPLAT JV Ohaji South Field in OML-53.
Anticipating additional growth in production from this hub, Waltersmith is expanding this facility to handle 20,000 bopd by the end of 2020.
‘’In addition to this operated asset, Waltersmith Petroman is part of the ND Western Consortium operating the OML-34 license in a Joint Venture with NNPC using an Asset Management Team (AMT) structure.
‘’As part of Waltersmith’s Growth strategy, in 2017 Waltersmith acquired a 300MW Power license for the planned Waltersmith Ugamma Power Plant, which would also involve processing about 225MMscfd of gas from assets within 30km of the Ibigwe Field (the Ibigwe Hub Strategy).’’
He said this will, in addition to providing power for Waltersmith’s growing Industrial Complex in Ibigwe, deliver significant additional power to the nation and delivering massive GDP growth for the consumers of this energy.
He continued: ‘’Furthering this strategy of domestic energy security, Waltersmith carried out a feasibility study for modular refining in support of the Federal Government of Nigeria’s aspiration and with the proximity of many producing oil, gas and condensate fields in the Ibigwe Hub.
By 2018, Final Investment Decision (FID) had been taken and in October 2018 the groundbreaking ceremony was done, effectively kicking off the construction phase in November 2018.
‘’The first phase of this modular Refinery targeted 5,000 bopd of own operated crude as feedstock with alternative sources including the over 7,000 bopd NNPC/SEPLAT OML-53 JV Ohaji South production processed at Waltersmith’s Ibigwe Flow station.
Negotiations on Crude Sales and Purchase agreements are at an advanced stage with both SEPLAT and NNPC.’’
During a media tour of the Waltersmith Modular Refinery and Petro-Chemical Company Limited in Ibigwe in Ohaji Egbema Local Government Area of Imo State, the minister of information and Culture Alhaji Lai Mohammed, described the establishment of modular refineries in the country as the result of the enabling environment created by the President Muhammadu Buhari-led administration.
Alhaji Mohammed said that the production of the daily refined crude amounting to 5,000 barrels per day in Imo State will increase the nation’s existing oil refining capacity via the use of modular constructed refineries.
Alhaji Mohammed also described the establishment of the modular refineries in the country as a result of the enabling environment created by the President Muhammadu Buhari-led administration.
He said what the company is doing is in support of government initiative which he said is coming at the right time as the government is deregulating the market, adding that the company supports the government policy on deregulation and removal of subsidies as it creates a market for what the company is doing.
The minister said modular refineries, unlike the conventional, is not very complicated as it produces two or three products, and a bottom product, which can be recycled for more.
He added that local refining of crude oil for oil-producing countries improves economic performance, provides jobs for a large number of people reduces capital flight and builds a new set of industries, especially petrochemicals.
Mohammed was accompanied to the refinery which is due for commissioning next month by the governor of Imo State, Hope Uzodimma; the minister of State, Education, Emeka Nwajiuba; the chairman, House Committee on Information, National Orientation, Ethics and Values, Hon. Segun Olubunmi; the executive secretary, Nigerian Content Development and Monitoring Board, Mr Simbi Wabot amongst others.
The minister said that the modular refinery was a good example of the reintegration of the nation’s resources, a development which he said, will put an end to the export of the country’s resources.
According to him, “What we have here today, Waltersmith Refinery, is a good example of reintegration of our resources. No longer are we going to have resources and we are going to be exporting them, but we are going to make good use of these resources and the process will be adding value to it.
“We can show Nigerians that while every government has been talking about modular refineries, no government has succeeded in turning the dream into reality until now.’’
Alhaji Mohammed said with the coming on board of medium-scale refineries like Waltersmith, Nigerians will soon experience cheaper petroleum products.
“With this kind of refinery, all issues of subsidy become completely irrelevant because we would be able to get fuel at a cheaper price, especially because everything that is being produced will be for local consumption,” he said.
The minister lauded the partnership between the Waltersmith Refinery and the Nigerian Content Development and Monitoring Board that holds a 30 per cent stake in the refinery, which will start with 5,000 bpd, and an additional 25,000 bpd in the second stage and then another 20,000 bpd to bring the capacity to 50,000 bpd in the third and final phase.
He said the administration will continue to showcase its monumental achievements because it has performed well in the execution of projects across the country.
“I am glad we are here today blowing our trumpet because we have created an enabling environment for this project,” he said, after he and his entourage, as well as governor Uzodinma of Imo State and some members of the National Assembly, were taken on a tour of the refinery, one of many of its type that are in different stages of completion in the country.
Also speaking, Uzodinma said with the establishment of the refinery, local content had become a success story in the country.
The governor stressed that while foreign companies were running away from the downstream sector, Watersmith was moving from upstream to downstream.
He said the need to enhance the existing downstream infrastructure and encourage private sector investment in building refineries and petrochemical plants in the nation cannot be over emphasised.
He said: “At the end of the day, they will put in place, a value chain that will not only help our economy but empower Nigerians.
“So, I am very, very excited about this project and I have no doubt in my mind that it will stimulate, not only our local economy here in the state, the national economy and indeed, the global economy.”
In his remarks, the executive secretary, Nigerian Content Development and Monitoring Board, Mr Simbi Wabote, said the Board believes that at least 10 per cent of Nigeria’s oil production should be refined through the modular refineries, because of its capacity to generate employment.
“With an average of ten direct jobs created for every 1,000 barrels per day capacity of a modular refinery, we believe that about 2,500 direct jobs and over 25,000 indirect jobs can be created if 10 per cent of Nigeria’s production is refined using modular refineries,” he said.