Modular refiners post outlook for 146,000 b/d

NCDMB facilitates 21,500 b/d capacity

Sopuruchi Onwuka

Nigerian Content Development and Monitoring Board (NCDMB) has successfully facilitated the development and streaming of four small scale refineries in the country, creating a commercial pathway for potential internal modular refining capacity for 146,000 barrels per day.

The board which is expanding its business facilitation and capacity development from the upstream to midstream and downstream segments of the petroleum industry is also making interventions in local production of other fuel and non fuel products.

Beyond refinery products, the NCDMB is driving local plant development for production of base oil, gas products and bottling cylinders, as well as other processing facilities that could take advantage of industrial parks strategically located in contiguity to oil and gas production hubs in the country.

The agency which is saddled with trapping down all economic benefits of petroleum resources and industry operations convened a stakeholders’ forum in Lagos to forge a coordinated approach towards domiciliation of all segments of oil and gas processing, storage and marketing activities in order to insulate Nigeria from the vagaries of global market forces.

Executive Secretary, Engr Simbi Kesiye Wabote, told The Oracle Today in Lagos that apart from trapping full benefits of Nigeria’s hydrocarbon resources, full development of the midstream and downstream petroleum industry would automatically domicile quality control, conserve foreign exchange income by displacing importation, and transform challenges in the operating environment to opportunities.

The Oracle Today reports that some of the pioneer modular refiners that attended the two day conference in Lagos had pointed out that they resorted to investing in crude distillation plants due massive pipeline losses inflicted by crude oil thieves in the country.

Although development of modular refining industry in the Niger Delta had long been canvassed by the former Chairman of the Nigerian Council of the Society of Petroleum Engineers, Mr Emeka Ene, as solution to environmentally destructive illegal refining racket in the Niger Delta creeks, it took the initiatives of some indigenous independent oil firms to stimulate onsite refining ventures.

The NCDMB has remained a driving force in conditioning the domestic economy for investments in manufacturing. It thus partnered some indigenous companies on investments in crude oil refining and gas processing.

Some of the modular refinery investors had run into funding glitches, moving the NCDMB to tap into its intervention fund for equity partnerships that have assisted the operating companies push the projects through to commissioning.   

According to documents available at the corporate communications unit if the NCDMB, the agency’s intervention in modular refining includes equity partnerships with Waltersmith which resulted in the delivery of the 5,000 barrels per day Ibigwe modular refinery in Imo State.

The agency also partnered Duport Modular Refinery on the 2,500 barrels per day plant located in Edo State. The Duport refinery is scheduled for commissioning later in the year.

In Bayelsa State, the NCDMB is also assisting Azikel Hydro-skimming Refinery realize the  12,000 barrels per day. It is also propelling Atlantic Refinery realize its processing plant capacity of 2,000 barrels per day.

Azikel Hydro-skimming Refinery and Atlantic Refinery are both in Bayelsa state, and their plants are under project stages.

In total, the agency’s partnership with investors will deliver total modular refining capacity of 21,500 barrels per day. Products from the refineries, according to Engr Wabote, would be top rate in quality, while plant reliability would ensure stable flow of supplies.

The move, according to Engr Wabote, was to achieve multiple objectives of sustaining uptime in the upstream operations of the companies, intervening in domestic products supplies and spurring revival of the nation’s hydrocarbon processing industry.

Besides, the board has established designated industrial parks that are strategically located close to oil and gas production sites to provide investment havens that lower the cost of operations.

However, the industrial parks are not exclusively designated for oil and gas related activities. It provides infrastructural and facility haven for forms of manufacturing in the country, the NCDMB declares.

The Oracle Today reports that there are also other modular refineries in the country operating without equity partnership with the NCDMB. They include the 6,000 barrels per day Edo Refinery; the 30,000 barrels per day Koko Refinery; the 10,000 barrels per day Opac Refinery; and the NDEP Refinery in Rivers State which currently processes 11,000 barrels per day.

The small scale refineries, also called modular refineries, are units of crude oil processing facilities that are conceived to grow scale of operations by creating additional process modules for churning out of greater volumes and varieties of products from hydrocarbon liquids feedstock.

Thus, all the modular refineries currently in operation have declared growth plans that entail plant capacity scalability. Edo Refinery is working on a second phase of the project to push processing volumes to 15,000 barrels per day.

Koko Refinery has also embarked on another phase of development to increase processing capacity from current 30,000 barrels per day to 50,000 barrels per day.

The Opac Refinery which is currently operating a 10,000 barrels per day plant has declared plans for next phase that would escalate operated plant capacity to 60,000 barrels per day.

Also, Waltersmith had earlier stated that it would increase the processing capacity at operated Ibigwe modular refinery to 40,000 barrels per day, and the Niger Delta Exploration and Production (NDEP) is also working on capacity expansion and upgrade.

In sum, the existing modular refining plants in the country currently hold 78.5 barrels per day processing capacity  will by full realization of immediate expansion plans push total capacity to about 150,000 barrels per day.

Thus, the nation’s young modular refinery industry currently hold potential to add processing capacity greater than the 125,000 barrels per day Warri Refinery and the 110,000 barrels per day Kaduna Refinery respectively.

With time and persistent capacity growth outlook, the scalable refineries appear to hold the future of the Nigerian midstream industry and also form the credible source of supply to the domestic market. The refineries promise to save the country from the prevailing massive drain on the economy.

It is therefore little wonder that the NCDMB is focusing on scalable midstream capacity development as another key center for value creation. The strategy of phased investments in scalable capacity development is a guaranteed win over the prevailing funding challenges and credit crunch that currently distress the industry.