Monday , August 15 2022
Edo Modular Refinery project, which is 95 per cent (mechanical works) completed in Ologbo, Ikpoba Okha Local Government Area of Edo State

Need for President Buhari to provide crude oil for Edo modular refinery

I want to appeal to President Buhari to as matter of urgency provide crude oil to Edo modular refinery to enable it start operation. Edo modular refinery is ready and waiting for crude oil from Nigerian Petroleum Development Company (NPDC) facility – oil mining lease (OML) 111 NNPC to starting operation. There is no explanation from NNPC for its delay to provide crude oil to Edo modular refinery. I am appealing to President Buhari to provide crude oil to Edo modular refinery since NNPC cannot perform its function. Edo modular refinery, Ologbo is very close (OML) 111 yet it cannot get crude oil to start its production. Edo modular refinery needs crude before it becomes an abandon project because NNPC cannot give it crude oil to refine. I see it as an attempt to frustrate Governor Obaseki. Nigeria is an oil producing country yet NNPC cannot give Edo modular refinery to refine. It is difficult to believe that in this era of subsidy payment, NNPC cannot provide crude oil for Edo modular refinery to start operation. My special appeal to President Buhari is to give crude oil to Edo modular refinery at Ologbo to start its operation.

If President Buhari can give Edo modular refinery now, Edo Modular refinery will increase crude oil production from 6,000 barrels per day (bpd) to 60,000 bpd. The project is being developed by two Chinese firms; AIPCC Energy Limited and the Peiyang Chemical Equipment Company Limited. Governor Obaseki has developed keen interest in this project. Edo is the only state that can boast of two modular refineries that cannot get crude oil from NNPC TO REFINE.

Operations have commenced and waiting for crude from President Buhari since NNPC cannot give it crude. The first phase will produce 1,000 bpd, while the second phase will produce 6,000 bpd; with a long-term goal of producing 60,000 bpd.

Phase one – which is completed – will target a production ratio comprising 55% diesel, 38% fuel oil and less than 10% naphtha. “Some of the products will be exported to boost foreign exchange earnings and by the time the refinery extends it into different phases, it would be able to take care of more than 80% of diesel requirement in Nigeria. The investment will benefit the Edo people through job creation, increased revenue and ease of pressure on other refineries.

The goal of modularization in the oil and gas market is to reduce capital costs, accelerate delivery schedules, and to efficiently minimize field construction, thereby ensuring every project is on schedule, budget, and scope. Edo modular refinery has been waiting since July, 2021 to commence operation and NNPC has refused to supply crude oil to Edo modular refinery. This is a key legacy project by the Gov. Godwin Obaseki-led administration to recalibrate the state’s industrial base, birthed through a Memorandum of Understanding (MoU). Godwin Obaseki, governor of Edo state, said in July,2021 that the modular refinery located in Ologbo, Ikpoba–Okha LGA, is ready for production. The refinery was developed by two Chinese firms: AIPCC Energy Limited and Peiyang Chemical Equipment Company Limited. It has a capacity of 6,000 barrels per day and it is expected to produce 50 percent of diesel (500,000 litres), 25 percent of naphtha (300,000 litres) and 20 percent of fuel oil (200,000 litres) from its feedstock.

‘’We were in China to sign this Memorandum of Understanding (MoU). I am very impressed that work has moved at such a speed in spite of the delay caused by COVID-19 pandemic,” Obaseki said during a recent visit to the facility. “The plant is ready to receive crude oil; it is ready to process and it is ready to deliver products. They have done the pre-commission with the Department of Petroleum Resources, they have certified the refinery. “What we have left now is to finalise the crude oil sale contract, these facilities have to get a certain type of crude from the escravos line and that is being finalised.

With President Buhari’s instruction to DPR and the Nigerian National Petroleum Corporation, NNPC, to provide all necessary support in securing oil and condensate feedstock for the Edo modular refinery, there are expecations that the project will be a success. Edo Modular Energy refinery is set to increase crude oil production from 6,000 barrels per day (bpd) to 60,000 bpd if President Buhari can give it crude oil to refine.

I want to draw Chief Sylva antention to Edo modular refinery initiative which will promote availability of petroleum products in the country, conserve foreign exchange utilisation for the importation of petroleum products, promote socio-economic development in order to stop restiveness, criminal and illegal refinery activities thereby sustaining peaceful co-existence in the Niger Delta and mitigate environmental degradation associated with illegal refinery activities, crude oil theft and pipelines vandalism, then Nigerians are on their way to the Promised Land.

Edo modular refinery has adequate refining capacity and meets all the criteria, hence the opportunities for modular refineries because they are simple, fast to start up and usually operating at optimal capacity. In theory, this is an advantage over larger refineries. It can also commence production with a small capacity of 5,000BPSD or 10,000BPSD, and grow its capacity over time by adding more modules.

As part of its strategy to reposition the oil and gas industry, President Buhari in 2016 launched a roadmap of short and medium-term priorities aimed at developing a stable and enabling the oil and gas landscape with improved transparency, efficiency, stable investment climate and a well-protected environment tagged “7big wins”. The fourth initiative in the roadmap, “Refineries and local production capacity” seeks to transit Nigeria from being an import-dependent nation into a net exporter of refined petroleum products through the modular refineries as vehicle.

This is seen as one of the ways and means of tackling non-availability of petroleum products. This much was evidenced when President Buhari performed the virtual inauguration of the National Oil and Gas Excellence Centre on January 21, this year. One of the issues he spoke about was modular refinery.
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Inwalomhe Donald writes from Ologbo, Edo State – inwalomhe.donald@yahoo.com

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