…Nigeria pioneer indigenous modular refinery.
…Upgrading refinery capacity from 6000 barrels to 11000 barrels per day.
…Refinery to produce petroleum products across downstream value chain and serves as import substitution for Nigeria.
The midstream of Nigeria oil industry has been a source of worry due to issues around the country’s refinery. Nigeria has four refineries owned by state oil firm, Nigerian National Petroleum Corporation (NNPC), but they are in dilapidated state, as the country spent millions of dollars to import Premium Motor Spirit (PMS) for domestic consumption.
This has raised concerns for the building of modular refineries across the country while there is need to develop local capacity through importation of foreign technical capacity and transparent clear guideline processes.
Indigenous challenge to modular refinery commenced with the Niger Delta Exploration and Production Plc. The company pioneered the concept of marginal field development in Nigeria, brought to production in 2005 first oil and currently one of the few producing marginal oil fields in the country. Niger Delta has brought new dimension to the commercialization of gas and adding refinery to the value chain of marginal field operations.
The company was granted a license by the Ministry of Petroleum Resources to operate a refinery at the Ogbele marginal field in Rivers state, then built the first topping plant with all value captured from Liquefied Petroleum Gas (LPG), propane and dry gas production through total elimination of gas. In his perspectives on the Ogbele refinery, Dr. Olayiwola Francis Fatona, a Petroleum Geologist and Managing Director of the Niger Delta Group, spoke at the International Forum for Women in Energy Oil and Gas (WEOG) on the topic ‘Modular Refining to Domesticate Nigeria Oil and Gas Supply Chain.’ He said, Niger Delta Exploration and Production Plc was privileged using a subsidiary Niger Delta Petroleum Resources (NDPR) to also be in forefront of pioneering marginal field development.
Dr. Fatona explained that in setting up an exploration and production company, Niger Delta continued a steady journey in metamorphosing itself as a fully integrated independent energy company. It came into production as Nigeria’s first marginal field operator way back in 2005 and it was the first commercially negotiated transaction of that nature in Nigeria where development of marginal field does not exist. The company has been fortunate and quite a number of other successful companies have followed its step.
“The company came into first oil production after it raised capital to find money and drill the well. And so, sustaining production requires that a company has unfettered access to other forms of energy.”
When Niger Delta started operations, there was perennial shortage of diesel in Nigeria coupled with scarcity and poor quality. “But as a company, it became a real survival strategy for us to find creativity and systemic solutions to ensure that we survive, he added.”
To drill well, put into pipeline and sell, energy is needed. Getting diesel and finding it was a problem for Niger Delta, even if it tries to get diesel, it had always been poor quality.
Dr. Fatona stated further that the company decided to take measures to survive by finding solution to get energy for its business. This was what informed the idea of the company taking some of its own production and process it into a- one product finished item.
Thus, NDPR inferred in 2008 to build a 1000 barrels per day refinery. Although it is a modular refinery and a topping plant. Fortunately, since 2011 when the refinery came into existence, it has been producing till date. Ogbele refinery is the first of such small footprint working refinery built in sub-Saharan Africa and also the first in Nigeria.
The plant has processed 1000 barrels of crude oil produced from the company’s field between 5000 to 6000 barrels per day. It produced diesel. The objective was to provide good quality diesel, give to contractors working for the company.
As the federal government deregulated diesel, NDPR had a bit of extra after operational usage hence almost 80% to 90% of the company’s daily diesel production, was sold into the domestic market. This has constituted much volume of additional diesel in Nigeria of which the country does not have to import the product.
Dr. Fatona said, the Ogbele refinery was built 25 years after the last refinery in Nigeria. He expressed concern that after such attempt by a private company and with the quantum of time it took to build the last refinery, Nigeria has grown in terms of population and urbanization, but has not invested in refinery. “If I give you the statistics of Ogbele refinery alone between 2012 when we got the license to operate it and today, this small refinery has produced more than 146 million litres of diesel and all these have been sold into the domestic market.” It has operated about 98% off time to 100% capacity. Presently, no refinery in Nigeria has attained this type of performance.
The significant impact of Ogbele refinery is attributed to the fundamental fact that it is small and easily managed and in total control of a young force that the company has. It has provided 100% energy needs of the company and for the company’s service providers who work for it. They don’t have to struggle to buy diesel, it was available for them to use.
The thriving Ogbele refinery has more than 200 licensed buyers and people who drove their trucks on daily basis to the company to obtain products from the refinery.
Dr. Fatona revealed that the indigenous refinery running through for 8 years, has transformed its small footprint infrastructure into a full flesh capacity and has been licensed as a 6000 per day facility. The company is almost at the concluding level of uplifting the capacity to 11000 barrels a day. It will not only be producing diesel but in addition produces marine diesel, jet fuel, heavy fuel oil and naphtha. NDPR has acquired a PMS train and naphtha converter that can covert naphtha from the refinery into PMS. Hopefully, the refinery will have a full complement of petroleum products. Products coming from the refinery will serve as import substitution for Nigeria.
Observing the present state of Nigeria refineries and huge money spent in importation of PMS, Dr. Fatona was of the view that, if the country has 10 to 20 of the small unit in Ogbele, with the sufficiency of space in Niger Delta, companies like NDPR can afford to refine resources with technology and replicate what it has done.
Niger Delta remains an icon setting many land mark milestones as model having evolved as a fully integrated independent Nigerian oil and gas institution.
SOURCE: energyfocusreport.com