The coming of energy park and modular refineries

THE Federal Government under President Buhari has kept its word by ensuring that modular refineries were not only given licenses but also encouraged to begin production. There is now a conducive environment for investors to open modular refineries in the country. About 35 modular licenses were issued in the past but nothing was done about it. The modular refineries bridge a supply gap of 53,000 bpd (approximately 8.5 million litres daily) in Nigeria. Nigeria will become West Africa’s refining hub by 2020-2021, supplying the region with at least 37,000 bpd (approximately 6 million litres daily). About 10 modular refineries will soon begin operation across the states of the Niger Delta region. The success rate of establishment of mini (modular) refineries in Nigeria is low; only one modular refinery has been commissioned since 2008 out of about 43 firms issued licences. However, the construction of 7,000bpsd OPAC Refinery in Umusetti, Delta State, and 10,000 bpsd Niger Delta Petroleum Resources Refinery expansion project in Ogbelle, Rivers State, are nearing completion owing to the implementation of government policies and the support from the Department of Petroleum Resources. A few other modular refinery projects, namely Duport Refinery Edo, Edo Refinery, Ikpoba Okha; Petrolex Refinery, Ijebu Ode; African Refinery, Port Harcourt and Southfield Refinery, Ologbo, have either completed or at different level of completion.

Governor Obaseki and President Buhari must be commended for the two modular refineries that will start operation in Edo State. The Energy Park, Edo, is the second industrial refinery facility in the state, different from the Edo Modular Refinery, which has been completed and set to receive feedstock from Escravos line in August. The park, which is the first of its kind in West Africa, is the only park with a refinery operation, gas processing plant and power plant sharing the same resources. Powered by Platform Capital, the energy park has a 10,000 barrel-per-day refining capacity, a 50 megawatts plant capacity and a 60 million scf gas processing plant. According to the Managing Director of Duport Midstream, Akintoye Akindele: “We realised that the best way to solve our energy problem is by making it last mile, where people can access it easily, thus making the cost lesser and the business scalable. We decided to build an energy park that has refinery operation, a gas operation that does CNG with a potential LNG, and a power plant with all sharing the same resources. Come October 1, 2021, the first energy park with a gas refinery, power and modular energy goes live, first time in the world.”

The park will commence operation with a 2,500 barrels per day refining capacity, a five-megawatt plant and a 40 million scf gas processing from the installed capacities of each operation. The Nigerian Content Development Board (NCDMB) invested $15 million to acquire an equity stake in Duport Mid-stream for the development of the park. Duport Midstream is among the indigenous oil companies that were recently awarded one of the 57 marginal oil fields in the country. This, according to the organisation, will enable them to further reduce their cost as they would be getting their gas and crude directly from the fields. We bid for the marginal field to process locally.  The energy park in Edo with modular refinery, gas, power plants and others will begin operations in october, 2021. On the back of ease of doing business reforms by the Governor Obaseki-led administration, Duport Midstream Company Limited (DMCL) has announced that the newly built energy park in Egbokor, Orhionmwon Local Government Area of Edo State will kick-start operations in October 2021.

The two modular refineries are located in Egbokor Village, Iyoba Ward, Orhionmwon Local Government and Ologbo in Ikpoba Okha Local Government, Edo State. The two refineries are under construction. Egbokor Village, Iyoba Ward, Orhionmwon Local Government. Edo State in the year 2021 can boast of two modular refineries in Nigeria. Please go to Egbokor village, Iyoba Ward, Orhionmwon Local Government and Ologbo, Ikpoba Okha Local Government to verify if you doubt my article. One of the two modular refineries under construction in Edo is Dupot Oil Modular Refinery, Egbokor Village, Iyoba Ward, Orhionmwon Local Government which is already exporting crude from their field in Edo State. Egbokor village which is the host community is benefitting greatly from the on-going construction works of the modular refinery. In order to ensure regular supply of petroleum products for domestic consumption and provide veritable platforms for Nigerians and investors to take advantage of these opportunities, the Federal Government launched some initiatives to support the establishment of private mini (modular) refineries.

Governor Obaseki and the two modular refineries will drive industrial revolution in Edo State. The petroleum industry in Edo State received a new boost recently as the Federal Government reduced the cost of obtaining a refinery license from $1,000,000(one million dollars) to $150,000 (one hundred and fifty thousand dollars) among other things. The ongoing Modular Refineries project at Ologbo in Ikpoba-Okha Local Government Area of the state and Dupot Oil Modular Refinery, Egbokor Village in Orhionmwon Local Government will on completion drive the state’s industrial revolution quest. Attempts to construct private refineries in Nigeria started in 1990 with the call for indigenous private participation in crude oil refining by the government.

Between 1990 and 2000, the Department of Petroleum Resources received over 100 applications. From 2001 to 2007, the 3-Stage Licensing (License to Establish – LTE, Approval to Construct – ATC and License to Operate – LTO) process, which is still in use to date was adopted. About 105 applications were received during the period, leading to grant of 21 LTEs in 2002 and 17 ATCs in 2004. Between 2008 and 2011, focus was placed more on mini (modular) refineries. Nine (9) LTEs were granted and two plants were fabricated, but only the 1,000 bpsd capacity Niger Delta Petroleum Resources refinery at Ogbelle River State was commissioned. From 2012 to date, about 34 LTEs have been granted for mini(modular) refinery projects; six (6) of these companies have been granted ATCs and are at different levels of construction.

• Donald writes in via inwalomhe.donald@yahoo.com

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