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Published On: Tue, Dec 8th, 2020

Modular crude refining: pmb breaks another barrier

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By Musa Ilallah

“The PMB led Federal Government of Nigeria has actualised its words by ensuring that modular refineries were not only given licences but also encouraged to begin production. The Government has put in place conducive environment for investors to open modular refineries in the country,”
These were the words of a former Senior Special Assistant to the President on Niger Delta Affairs, Mr Edobor Iyamu at a dialogue in the Niger Delta region last year.
While reiterating President Muhammadu Buhari’s decision to ensure that Niger Delta and indeed the whole country benefits from oil exploration activities in the area, Iyamu made a case for the government, noting that 35 modular licences were issued in the past but nothing was done about it, further argued that the issue of modular refineries was not a “fluke” and would be utilized maximally by all licensees.
The Federal Government has updated the situation disclosing that about 43 refineries, including large scale and modular refineries have been licensed to refine petroleum products across the country.
In 2019, the Senior Technical Adviser to Nigeria’s Petroleum Minister on Refineries and Downstream Infrastructure, Rabiu Suleiman had said that the plan of the modular refineries by government was aimed at meeting local demand and export of petroleum products.
As an incentive to fast track the coming on stream of the modular refineries, government had also granted import waiver to all licenses approved and have shown siginificant progress in building the refineries.
It is not in dispute that Nigeria as a leading producer of crude oil and gas in the world had remained as the only oil producer that relies completely on the importation of refined petroleum products to meet its local needs.
Technocrats, Experts and Professionals in the oil and gas industry have said that this development had largely been the reason that had given rise to economic challenges, infrastructure shortfall, unemployment, budget deficit as well as increased and unending poverty in the country.
Speaking about efforts to revamp existing refineries and open up the space for many modular refineries in the country, Suleiman further stated: “Today, we have about 43 new licensed refineries, both modular and large sized refineries. We have 650 000 barrels per day capacity licensed refinery at Lekki, Lagos to Dangote Group, 250,000 barrels per day licensed refinery to Petrolex and another 100,000 barrels per day licensed refinery was given to a company in Port Harcourt. Capable of creating jobs for more than 70,000 Nigerians, Dangote refinery costs Aliko Dangote, the President of Dangote group $15 billion, or even more by the time it is completed in 2021.
This is in addition to many other modular refineries being established with capacities of refining from 1,000 to 30,000 barrels of crude per day.
It is on record tha the objective of modular refinery is to ensure that the huge capital requirement needed for setting up bigger refineries had been identified by government as a serious hindrance to achieving the target of meeting market demand and saving forex by government. We want crude to be refined in Nigeria so that we can take advantage of the total value chain of crude oil refining locally.
It is therefore very heart warming when recently the President Muhammadu Buhari commissioned the first modular refinery to come on stream in the country. It is located at Ibigwe in Ohaji Egbema Local Government Area of Imo State of Nigeria and owned by Waltersmith, a Nigerian company.
Waltersmith modular refinery is a Public-Private -Partnership, PPP arrangement which indicates government’s new business model for refineries.
During the virtual inauguration of the 5,000 barrels per day Waltersmith modular refinery, and Ground-Breaking Ceremony for the Phase-2 works to expand the capacity of the refinery to 50,000 barrels per day, President Buhari said that the establishment of modular refineries in the country will make petroleum products available in the country and eliminate importation.
In the words of President Buhari: “the deployment of modular refineries was one of the four key elements of this administration’s Refinery Roadmap rolled out in 2018, whose implementation will make Nigeria a net exporter of petroleum products.”
While expressing delight that Waltersmith refinery was coming on stream within two years of commencement of the Roadmap, he also said that “there is increased momentum in the other three focus areas under the Roadmap covering the rehabilitation of existing refineries, co-location of new refineries, and construction of greenfield refineries. The realization of the Refinery Roadmap will ultimately lead us to becoming a net exporter of petroleum products not only to our neighbouring countries but to the world”.
The President noted that hundreds of direct and indirect jobs were created during the construction of the first phase of the project in addition to the various business opportunities, and that the second phase of the project will create bigger and additional employment opportunities.
The Buhari Media Organisation (BMO), in a statement signed by Niyi Akinsiju and Cassidy Madueke, Chairman and Secretary respectively, noted: “This administration has shown its determination to solve peculiar geopolitical challenges and leave equitable landmarks across the country, and we are sure that the Waltersmith modular refinery will build up investors’ confidence and subsequently create assurance of possibilities in the investors’ space”.
It is therefore undoubtedly clear that the PMB administration had taken the ‘bull by the horn” by breaking a 15-year jinx since the first set of modular refinery licenses were granted in 2005 by the then President, General Olusegun Obasanjo.
Certainly, President Buhari is paying his dues in strengthening the economic potentialities of the country. For PMB and his administration, nothing is too much in making his dream of liberalising the petroleum sector a success story.
By Musa Ilallah

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