FG’s Modular Refineries To Attract N875bn To N/Delta

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BY FESTUS OKOROMADU,

The proposed 23 modular refineries by the federal government is expected to attract about N875 billion ($2.8billion) to the Niger Delta region in the short run by the time they become operational, LEADERSHIP Friday investigations have revealed.

The federal government had recently reiterated its commitment to build modular refineries in oil-producing areas of the Niger Delta region.

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, disclosed this as part of efforts to woo businessmen at the offshore technology conference holding in Houston, United States.

Vice-President Yemi Osinbajo had on March 25, 2017 assured that the proposed modular refineries would be sited only in oil-producing areas, as part of measures to address the developmental challenges in the areas.

LEADERSHIP Friday checks revealed that if the apex government restricts itself to the 23 modular refineries it plans to license in the short term, the government may attract investments worth $460 million from private investors into the region.

It takes about $15-20million to build a modular refinery and $15,000 to refine a barrel of crude oil while 5,000-10,000 barrels could be refined by a modular refinery.

Taking a cue from the international price tag accessible in both short and long term, it is envisaged that investment in modular refineries will assuage the fears of the people of the region who cut across nine states of the South- West, South-South and South-East.

The nine states that are the fulcrum of the operational activities of the Niger Delta Development Commission (NDDC) are Ondo, Bayelsa, Rivers, Edo, Delta, Akwa Ibom, Cross River, Imo and Abia.

Experts have also said the operations of modular refineries may also de-escalate tensions and terminate insurgency in the coastal region.

Stakeholders say it remains to be seen whether if this policy is fully implemented the 60 million barrels per day of fuel required by the country would be met without squabbles.

Conventionally, the cost of building a refinery that would undertake complex hydrocracking, hydro-skimming and catalytic cracking, as well as refine 250-500,000 barrels per day is put at between between $5-15 billion.

Similarly, experts have also said the federal government may, on the long run, require over $100 billion to set up modular refineries in all the creeks in the volatile area.

Our findings also revealed that the huge fund would cater for modular refineries in, at least, 5000 creeks identified by sources in the Nigerian Navy.

Barely two months after the federal government announced its commitment to the establishment of modular refineries in the Niger Delta, investors have indicated interest to put in about $2.4 billion to actualise the vision.

Consequently two  communities in the region are set to be the host of modular refineries, with a total production capacity of 100,000 barrel of crude per day.

They are Eghudu, Ovia North East local government area of Edo State and Gbaramatu Kingdom in Warri South-West local government area, Delta State.

Heeding to government’s call, a leading United States modular refinery investor, Missouri American Energy; Moham, sent a team into the country in March.

The team which was led by the President of Moham, Mr Henry Iwenofu, alongside a delegation of the company’s top officials, including the local promoters paid a visit to the Minister of State for Petroleum, Dr. Ibe Kachikwu.

They said they were set to establish a $200 million with a production capacity of 20,000 barrel per day in Gbaramatu Kingdom, Warri South-West local government area of Delta State.

While speaking with ministry officials during they visit to Abuja, Iwenofu said the $200 million is budgeted by the company for the fabrication and installation of Gbaramatu Modular Refinery.

Just last week, a U.S.-based businessman, Mr Charles Ihaza, said he was set to invest over $2 billion in a modular refinery with the capacity of producing about 80,000 barrels of refined petroleum products daily.

Ihaza who disclosed this at a forum on Environmental Impact Assessment (EIA) of the proposed refinery in Benin added that he had acquired about 453.9 hectares of land to establish a modular refinery in Eghudu, Ovia North East local government area of Edo.

Speaking on the choice of the site of the project, he said “I decided to site the refinery in Eghudu so as to help our people back home in Nigeria and I am very passionate about this project.

“As part of our social corporate responsibilities to the host community, we are going to construct roads, build satellite clinics, standard primary and secondary schools and a functional international market.

“I know what it takes to establish and manage a refinery, and we are already discussing with the relevant Federal Government agencies on the immediate commencement of the project”.

Meanwhile, operators of artisanal refineries in the region have formed a group to actualise the plan to establish community-based modular refineries in the area.

The group known as Modular Refinery Business Stakeholders’ Forum was launched in Ughelli, Delta State, last week Monday.

The chairman of the forum, Para Ekiyes, told journalist that the forum was to forge a common front that would engage the relevant authorities on the proposal.

According to him, the forum would ensure smooth take off of the policy when the government comes up with the operational guidelines.

He urged government to urgently release the guidelines to enable the local people participate legally in the downstream sector.

Government, on its part, has continued to stress its commitment to actualising the plan of replacing illegal refineries with modular refineries, as part efforts to develop the region.

Meanwhile, the coordinator, Presidential Amnesty Programme (PAP), Brig.-Gen. Paul Boroh (rtd) has said federal government’s endorsement for modular refineries to be built in oil communities to protect oil pipelines will make the Niger Delta people part of the oil business.

Boroh said this in a statement by Ms. Stella Inametti, the PAP’s Head of Media and Communications, on Thursday in Abuja.

She said Boroh made the remark on a Voice of Nigeria (VON’s) programme, ‘In the News’.

Inametti quoted Boroh as explaining that government resolved the issue of illegal refineries in favour of the people after high level stakeholders’ meetings.

“In our fact finding and confidence building efforts, our high level government officials led by the Vice President met with the Niger Delta people, identified and articulated their immediate and future needs and we are now making spirited efforts to address them”, he stated.

 

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