Page 4 - DMEA Week 25.pdf

DMEA Commentary DMEA
Welcome progress
in modular
refining in Nigeria
With investments appearing to gather pace and construction efforts moving towards the end phase, Nigeria’s edgling modular re ning sector provides a rare source of good news in the country’s downstream.
afrICa
WHat:
Investments in Nigerian modular re ning are continuing, with the local NCDMb taking a hands-on approach
to encouraging development.
WHy:
The country’s re ning sector has struggled in recent years and there is growing concern about the ability of modular re neries to cost- effectively decentralise fuel production and improve distribution.
WHat next:
The integration of these facilities with small upstream assets to create fuel and energy hubs offers a localised solution to much broader downstream issues.
NIGerIA’s Content Development and Moni- toring Board (NCDMB) announced plans this week to acquire an equity stake in the 12,000 bar- rel per day (bpd) modular re nery being built by Azikel Petroleum in Bayelsa state.
e Azikel Hydroskimming Modular unit is expected to come into operation in 2021 when it will start producing products for consumption in Bayelsa and the Niger Delta region.
e facility is being constructed in Obun- agha, Bayelsa and will produce 1.3 million litres per year of premium motor spirit (PMs) as well as diesel, kerosene, LPG and small volumes of heavy fuel oil.
In a statement, NCDMB executive secre- tary simbi Kesiye Wabote said shell Petroleum Development Co. (sPDC) would partner with Azikel re nery and provide feedstock.
The regulatory body is taking a proactive approach to developing modular refining in Nigeria, with Wabote noting that NCDMB will nalise a partnership by the end of 2019 for the development of another such facility at Calabar,
Cross river state.
e acquisitions follow NCDMB’s purchase
of a 30% stake in Waltersmith re ning and Pet- rochemical Co.’s Ibigwe modular re ning project in Imo state for Us$10 million in mid-2018.
e 5,000 bpd plant, to be operated by Wal- tersmith, will produce kerosene, diesel, heavy fuel oil and naphtha, using crude sourced from the nearby Ibigwe oil and gas eld.
e Africa Finance Corp. (AFC) approved a Us$35 million debt facility to support the project in July 2018.
Waltersmith retained a majority sharehold- ing of 70% and head of strategy and project development Jerry Obionu told DMeA at the time that the funds had been put to use immedi- ately, with money from the AFC debt injection to be “disbursed based on agreed milestones with the ePC contractor.”
e main construction contractor, VeLeM, is a consortium of Us rm VFuels and Nigerian company Lambert electromec Ltd. Obionu said: “VFuels is responsible for building the inside
Wabote signs the Azikel re nery agreement
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Week 25 26•June•2019