As analyzed by experts, Nigeria spends millions of Dollars on importation of refined petroleum products which, if produced at home would have been a big ease on the economy, especially when it comes to problems of job creation and other variables.
But in recent time, this problems which is now referred to as hydra headed monster seems to be on its way of being tamed with moves by some concerned Nigerians who are keen on seeing the country out of the problems with indigenous refineries in the country.
Among these is African richest man, Alhaji Aliko Dangote who is ready to commit not less than $12 Billion to refinery project in the country. Apart from that, Nigeria’s former interior minister, Captain Emmanuel Iheanacho, has also positioned himself to help the country see the end of petroleum products difficulties which has been ravaging Nigeria over the years.
The former minister who has been in the business of up and down stream sector of petroleum industry is dedicating a huge investment of Integrated Oil and Gas Limited, the oil company he has been running in the last 12 years.
Economic experts who are monitoring petroleum activities in the country, believe that the project will enhance economic value added opportunities to be realized in terms of jobs, profits and technology transfer which would become manifest for the growth of the nation’s economy. They also said that the project would facilitate the conservation of scarce foreign exchange whilst generating major export earnings.
Mr. Akin Omotosho, an economic analyst said “The proposed 200, 000 bpd production refinery would attract more investments to the country and also help the country to solve its unemployment quagmire”.
Meanwhile, the recent gesture received from the U.S. Trade and Development Agency has been described as an assurance on the speed at which the project will be executed in the country.
Analyst opined that the approval of grant of $1 million (N360 million) for the detailed engineering design of 20,000 barrel per day (bpd) of the modular refinery showed that execution of the project will be achieved in record time.
Austine Ogunleye, energy analyst, said “Nigeria is truly on its way out of economic problems with this project. With execution of it, petroleum product will never be problem and I see the country in a greater place with huge opportunity this investment will draw into the country.”
He added that “By delivering this grant, the agency has demonstrated its commitment to the infrastructure development and economic growth of Nigeria, especially in the areas of export technologies and services that promote the country’s refining capacity.”
Meanwhile, The U.S. Ambassador to Nigeria, Mr. Stuart Symington, during the official signing of the approval of $1 million grant agreement in Lagos, commended the initiative of Eko Petrochem and Refining Company’s management.
He expressed the hope that the proposed 200, 000 bpd production refinery would attract more investments to the country and develop host communities. ‘‘The grant was meant for detail engineering design and development of the proposed refinery in Tomaro Industrial Park in Lagos.
‘‘I feel honoured to be part of the success story. I also promised to support the projects to actualization.” The U.S. Ambassador to Nigeria commended the Chairman of Integrated Oil and Gas, Capt. Emmanuel Iheanacho, for his commitment to the project.
He added that Iheaneacho noted that the investment was coming at a time when the country needed it most. ‘‘He is doing it at a time with a government that believes Nigeria can do what can be done anywhere in the world.’’
In addition, Captain Emmanuel Iheanacho said that the company would continue to celebrate the delivery of the support assistance from the USTDA. ‘‘We also need to source investment funds, to fully actualise the built-up project.
The scale of the cash investments required is of the order of $250 million. ‘‘We expect to raise this huge sum from borrowing or from equity investment committed to the project. For any potential investor, please contact me and trust me it will be money well spent.
‘‘The vision of Eko Petrochem and Refining Company is to develop a modular scalable 20,000 bdp greenfield refinery/topping plant. ‘‘Several studies including the Front End Engineering Design (FEED) as well as the Environmental Impact Assessment (EIA) studies have been completed.”
He added that, ‘‘the study for the Detailed Engineering Design will soon be ready, prior to applying for the Approval to Construct (ATC) from Department of Petroleum Resources (DPR) as well as other regulatory approvals required.’’
Iheanacho added that he was not deterred by the prevailing rough economic climate in the country, as he insists that taking giant steps in life to conquer greater heights remains his turf.
Speaking on the approval of the project, he maintained: “We have approval from the Department of Petroleum Resources (DPR) to float the refinery. It’s a modular refinery. They came and inspected the location before giving us that approval. Setting up a refinery is a tedious undertaking in many respects.
“You have to get government approvals every step of the way from start to finish. You’ll get license to establish, after that you’ll get license to construct and after that, the license to operate.
“Let me say this; the type of project we are promoting is guided by the availability of all of those licenses and approvals. The project is not something you do under the table. In getting the approval, you’ll also answer a whole lot of questions with proof. Where you’ll get the raw material to refine? When you’ve refined, who will buy as in where will you sell? Environmental Impact Assessment (EIA), technical capability among others.”
On environmental Impact assessment, he said “The Environmental Impact Assessment (EIA) is ongoing and all these certifications have been acquired at different stages. The EIA involves those who are in close proximity to this place.
“When we wanted to start, the people were there and they signed and showed their support. Public hearing will be done at the right time. It’s a big project. It’s not something done in secret.”
He further explained that refinery project was an enormous investment. “Building a refinery isn’t a child’s play. It’s quite expensive. When I read in the newspapers about how much Dangote is going to spend on his refinery, I think they talk about $12 billion. Sometimes I am frightened to hear such amount of money.”
According to him, there are different prices for different categories of refinery. For instance, he continued, “if you want to build 20,000 barrels per day (bpd) refinery, you would need about $75 million but there is a caveat. The caveat is that, it depends on what you want to produce.
“If you want to produce gas oil (diesel), fuel oil, naphtal, LPG, then it is about $75 million. But if you want to go a step further and produce PMS for the same 20,000 bpd capacity, then your investment amount will take you about a quarter of a billion dollars ($250 million).
“So, either way, it is a very expensive project. Like I told you earlier, it is one of the hardest things I will have to undertake and I’m not afraid to do it because I have done every other thing in shipping; but this is the real challenge.
“To sit down and conceive this idea was quite a mental task. You have to get the experts who understand it to be able to put the feasibility together; to be able to give your presentation to DPR.”
Captain Ihenacho also revealed on funding of the project that “Banks’ job is to provide money for business and businessmen are to provide workable ideas that will impress the banks. Our own is to address the issue of feasibility, location and EIA among others.
“If we bring it and the banks start looking, they will look what you’ve done and even look at the possible cash flow; where you’ll get your crude from and all that. Once the bank connects the dots, it will provide the money.
“Having said all that, we could get the money from Nigerian banks; we could get the money from international financial institutions like AFC, AFRIEXIM and EXIM banks of different countries because you know that if a country is in the business of selling refining equipment, then they will give money to their own people to loan to the person who will buy it.”
