The modular refineries option

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President Muhammadu Buhari’s remarks to the effect that the establishment of modular refineries in the country will make petroleum products available in the country and eliminate importation are quite reassuring and soothing. Coming on the heels of the incessant increase in the pump price of petrol, otherwise called the Premium Motor Spirit (PMS), the president’s statement could not have been more apt and timely.

President Buhari spoke recently at the virtual inauguration of the 5,000 barrels per day Waltersmith modular refinery in Ibigwe, Imo state, as well as the ground-breaking ceremony for the phase-2 works to expand the capacity of the refinery to 50,000 barrels/day. He said the deployment of modular refineries was one of the four key elements of his administration’s Refinery Roadmap rolled out in 2018, adding that its implementation will make Nigeria a net exporter of petroleum products.

He expressed delight that Waltersmith refinery in Ohaji Egbema local government area of Imo state was coming on stream within two years of the commencement of the roadmap, after many years of granting licenses for the establishment of modular refineries with nothing to show for it.

”Furthermore, there is increased momentum in the other three focus areas under the roadmap covering the rehabilitation of existing refineries, co-location of new refineries, and construction of greenfield refineries. The realisation of the Refinery Roadmap will ultimately lead us to becoming a net exporter of petroleum products not only to our neighbouring countries but to the worldwide market.

”This modular refinery is the largest commissioned modular refinery in the country today. The role played by the federal government through the Nigerian Content Development and Monitoring Board (NCDMB) in going into collaboration with Waltersmith Refining and Petrochemical Company is novel in concept and superb in delivery,” he said.

The president described plans to commence the expansion of the capacity of the refinery to 50,000 barrels per day to refine crude oil and condensates as an important part of economic reforms the country is undergoing. “I look forward to seeing this new phase completed within the target timeframe,” he said.

President Buhari, therefore, directed the Ministry of Petroleum Resources, Department of Petroleum Resources (DPR), the Nigerian National Petroleum Corporation (NNPC), as well as all relevant government agencies to provide Waltersmith Company all the necessary support to access crude oil and condensate feedstock for the timely delivery of the additional capacity.

In line with his administration’s agenda on job creation, the president said he was pleased to note that hundreds of direct and indirect jobs were created during the construction of the first phase of the project in addition to various business opportunities. Equally, he expressed hope that the construction of the second phase of the project will create bigger additional employment opportunities.

President Buhari thanked the local community and the people of Imo state for hosting the refinery, which, he stressed, will bring prosperity and economic development to the area. He commended the Ministry of Petroleum Resources, the Minister of State for Petroleum Resources, Timipre Sylva, the chairman and members of the governing council, and the management and staff of the Nigerian Content Development Board for making the public-private partnership a success.

He also commended the chairman, board, management and staff of Waltersmith Refining and Petrochemical Limited for their professionalism and focus in getting the project completed.

Governor Hope Uzodinma of Imo state and the minister of state, petroleum cut the tape on behalf of the president at the event which was also attended by the Group Managing Director of NNPC, Mele Kyari, the Executive Secretary, NCDMB, Engr. Simbi Wabote, and the Chairman of WalterSmith, Abdulrazaq Isa.
Mallam Kyari, who assumed duties as the group managing director of NNPC in July last year, vowed to reverse the trend of petroleum products importation in the country by rehabilitating the existing refineries and encouraging private sector investment in the refineries sub-sector.

“We must end the trend of fuel importation as an oil producing country. We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries. We will support the Dangote refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023”, Kyari said.

He said the age-long federal government’s target of raising crude oil production and reserves to 3 million barrels per day and 40 billion barrels, respectively, was possible and that he would galvanise the corporation to achieve it by 2023.

We commend the efforts of the Buhari administration in the deregulation of the downstream sector of the oil and gas industry with its concomitant removal of petrol subsidy as well as the promotion and facilitation of modular refineries in the country. The removal of fuel subsidy has saved government over N1 trillion annually hitherto spent on fuel import.

However, we advise the federal government to expedite the rehabilitation of its four refineries in Kaduna, Port Harcourt, and Warri. In the alternative, the federal government should build new refineries in order to meet local demand for petroleum products and eliminate the fraud associated with the importation of fuel.

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