BREAKING NEWS, Oil & Gas
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Private investors such as Ode Aye Refinery Limited are taken up the challenge of building more refineries in Nigeria
| By Anayo Ezugwu | Dec 14, 2015 @ 01:00 GMT |
PRIVATE investors are venturing in refinery business in the Nigeria. Apart from the Dangote Group which announced its intention to build refinery in Lagos, Ode-Aye Refinery Limited has also concluded plan to establish Greenfield and modular refineries in the country in the next 18 months. Modular refineries are mini-refineries with capacities ranging from 1,000 to 10,000 barrels per day, bpd, which can be assembled and separated easily for enhanced performance and efficiency.
Prince Bayo Otulana, director of the Ode-Aye Refinery Limited, stated this in Uyo on Monday, November 30, adding that the refineries would be located in Ondo and Lagos States. Otulana said the modular refinery would be completed within 18 months from January 2016, while the Greenfield refinery would take a period of 36 months to be completed. When completed, the Greenfield refinery is expected to refine 200,000 barrels of crude oil per day, bpd, while the modular refinery will have three units and produce 3,000 bpd from each of the units.
The company has made adequate arrangements to ensure the effective take-off of the refineries in both states. It has also arranged with the federal government through the Department of Petroleum Resources, DPR, to ensure adequate supply of crude to the refineries.
“We have secured adequate incentive from the government through the Department of Petroleum Resources. They have promised to supply us 60 per cent of the raw materials, while we will source for the remaining 40 per cent from private markets,” he said.
The modular refinery would cost approximately $8 billion upon completion. On the source of funding, Otulana said the refineries would be funded by Lyords Offshore Funding Corporation through project guarantors of bank instrument issued by 35 banks in the world at a single digit interest rate.
He said that the company had secured licences for the refineries and had Cospower Engineering Pvt. Limited from India as its technical partner to ensure that the dream comes to reality. According to him, each of the refineries will generate 1,000 direct jobs and more than 5,000 indirect jobs for Nigerians.
Ode-Aye Refinery Limited is not alone in trying to make Nigeria a petroleum refining country. Dangote Oil Refinery Company Limited had in October this year said it would build 600,000 barrels of crude oil per day (bpd) plant in Lagos. According to the company, the refinery will be located at the Lekki Free Trade Zone in Lagos, and would be the world’s largest refinery.
The refinery, sited on 2,600 hectares of land will produce gasoline, diesel, aviation fuel/household kerosene, slurry as raw material for carbon black, as well as 750,000 mtpa of polypropylene and fertilizer.
President Muhammadu Buhari had in June this year granted licences to 65 Nigerian companies to construct modular refineries. The companies were selected from about 285 applications that were screened for the purpose.
The decision of the federal government to award licence to establish refineries was born out of its desire to see the increase in domestic refining capacity to meet local demand, thereby reducing subsidy on huge import bills.
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