By Fred Ojiegbe
Modular refinery operators in the country have appealed for the intervention of the federal government on the need to adopt creative initiatives to address the nagging issue of irregular supply of feedstock to the refineries. They further advocated for a unique window of forex access to facilitate seamless operations and address the dysfunctions of the country’s pipeline infrastructure.
These submissions were made at the just concluded Nigerian Content Midstream and Downstream Oil and Gas Summit organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Lagos. The requests of the operators were part of the communique of the summit which was read by the Manager, Corporate Communications – NCDMB, Mr. Esueme Dan Kikile at the end of the summit on Tuesday, May 24.
According to him, delegates at the summit advocated that the Federal Government should divest from the petroleum depots, requesting that the NCDMB should consult more with midstream/downstream stakeholders to co-produce solutions to the peculiar challenges confronting the sector. While highlighting the challenges that modular refinery operators face in sourcing forex, they called attention to the hurdles and delays that complicate the process of operationalizing a valid import waiver.
The two-day summit received 11 papers and featured three-panel sessions and at the end came up with a few high-impact actions that would help to maximize the potentialities in the midstream/downstream sectors of the oil and gas sector. One of the action items is an increase in NCDMB’s collaboration and alignment with other relevant ministries, departments, and agencies as well as stakeholders to mainstream Nigerian Content bottom lines in refining, processing, storage, construction, fabrication, distribution, marketing, and retail to liberate the potential of the sectors.
Other suggestions point to the need to encourage accelerated investment in modernizing and upscaling the local supply chain to ease petroleum product distribution and to formulate and implement policies and interventions to support indigenous operators and make them globally competitive in terms of quality delivery and product pricing. The recommendation also included the need to incentivize the collocation of modular refineries and the depots, and the Free Trade Zones to enable easy off-take of petroleum products and promotion of the utilization of gas as an energy source of choice in Nigeria.
Participants at the summit observed that the midstream and downstream sectors have numerous leverage points to create value and these opportunities are yet to be fully explored. They also indicated that the modular refineries could be potential game-changers as they are well-suited to meet the demands for refined petroleum products in their catchment areas.
Declaring open the Summit, the Minister of State for Petroleum Resources, Chief Timipre Sylva stated that the Nigerian Oil and Gas industry is currently in the phase of exploring the vast opportunities and potentials associated with the midstream and downstream sectors and commended the NCDMB for intervening to foster dynamism in the sectors through the summit.
He acknowledged that the midstream and downstream sectors did not receive the deserved focus in the past but hinted that the situation was set to change because the recently enacted Petroleum Industry Act (PIA) contains fiscal incentives to attract investment in gas development, distribution, penetration, and utilization and provides exceptional care for host communities. Sylva charged industry stakeholders to take determined steps to unlock natural gas and domestic production potentials and use the opportunities in the gas ecosystem to drag millions of Nigerians out of energy poverty.
The Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote, while welcoming the participants, assured them that their recommendations would be considered during policy formation. He also promised that the Board would liaise with relevant agencies to address some of the identified challenges that are outside the remit of the Board’s mandate.
Giving a rundown of the Board’s achievements in the midstream and downstream sectors, Wabote listed the partnership with Waltersmith, which resulted in the delivery of the 5,000 barrels per day modular refinery in Imo State, the 2,500 barrels per day Duport Modular Refinery located in Edo State, which is due for commissioning this year as well as the 2,000 barrels per day Atlantic Refinery and the 12,000 barrels/day Azikel Hydro-skimming Refinery both in Bayelsa state, which are under construction.
Other achievements of the Board include the partnership with the NNPC Limited to construct a 50,000 liters petroleum products terminal in Brass, the partnership with Bunorr Integrated Energy Ltd for the establishment of 48,000 liters/day Base Oil Production Facility in Port Harcourt, Rivers State, which is due for commissioning this year and the ongoing construction of the Eraskon Lube Oil factory in Gbarain, Bayelsa State.
Dwelling on the LPG value chain, Wabote stated that the Board had gone into partnership with some investors to develop some projects. Some of them included the partnership with NEDO Gas Processing Company in Kwale, Delta State for the establishment of 80MMscfd of Gas Processing Plant and a 300MMscfd Kwale Gas Gathering hub, partnership with Triansel Gas Limited in Koko, Delta State for the establishment of 5,000MT LPG Storage and Loading Terminal Facility and partnership with Brass Fertiliser for the development of a 10,000MT/day Methanol Plant at Odiama in Brass.
Others are the partnership with Butane Energy to roll out LPG Bottling Plants and Depots in Abuja and 10 northern states and partnership with Southfield Petroleum for the establishment of 200 MMscfd gas processing plant at Utorogu, Delta State to produce 123,000MTPA of LPG, which is about 10 percent of current LPG demand nationwide. Other investments include the partnership with MOB Integrated Services for the construction of the 500MT Inland LPG terminal which is currently in operation at Dikko, Niger State as well as the partnership with Amal Technologies to set up a plant in Abuja to produce Smart Gas/Smoke Detector Alarm devices.
NCDMB lauds Temile/Hyundai new LPG Vessel deal
In a related development, the NCDMB has congratulated indigenous shipping company, Temile Development Company on the contract signing agreement with Hyundai Mipo Dockyard (HMD) for the construction of a new 23,000 cubic meters Liquefied Petroleum Gas Carrier Vessel. The indigenous company also signed a separate agreement with NSML – an integrated maritime services subsidiary of Nigeria LNG Limited for the construction supervision of the vessel.
The LPG carrier vessel is the second that is being constructed by the Temile Development Company and is a sequel to the first vessel which was constructed in 2018 and is currently chartered to Nigeria LNG Limited for domestic LPG supply.
In a video message he delivered to the agreement signing ceremony held at the sidelines of the 2022 World Gas Conference in Daegu, South Korea, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote saluted Temile Development Company for its bullish initiative in investing in an area that is regarded as off-limits for local players. He described the accomplishment as evidence of significant growth in capacity and confidence of local companies to play in the international arena and in complex areas of the oil and gas industry.
The new 23,000 cubic LPG/NH3/VCM Carrier to be constructed is a high-end specification vessel that has been designed by NSML in accordance with bespoke requirements using HMD’s highly efficient eco-design. The new LPG carrier is expected for delivery on 26th July 2023 at HMD in Ulsan, Korea.
Wabote indicated that the agreement signing event and subsequent construction and supervision of the contract align with the Board’s strategic plan of maximizing the potentials in the Midstream and Downstream Sectors of the Nigerian oil and gas industry, especially as the oil and gas industry strives to actualize the Decade of Gas policy of the Federal Government.
According to him, “this project clearly supports our LPG penetration initiative in Nigeria and will further close the gap in LPG penetration in Nigeria.” He stated further that the project will bring invaluable local content opportunities in technology and innovation, human capital development and research and development.
Temile’s Chief Executive, Mr. Alfred Temile said ‘’We are delighted to execute the construction of our new LPG carrier with HMD, bringing onboard NSML to supervise the construction, as an indigenous company this demonstrates our commitment and support to the Nigeria Local Content Act and as well establishes our confidence in local capacity to deliver international acceptable standards.