Edo Refinery and Petrochemicals Limited will become the first to respond to Federal Government’s recent mandate for all modular refineries to open shop or risk losing their licences.
Developed by AIPCC Energy Limited at Ologbo, Ikpoba Okha local government area of Edo State, management of Edo Refinery has assured that it will begin operations in October.
The modular refinery will get its feedstock (crude) from the Nigerian Petroleum Development Company’s (NPDC) facility – oil mining lease (OML) 111, located in Oredo, Ologbo near Benin.
According to the management of AIPCC Energy Limited, the 6,000 barrels per day (bpd) capacity modular refinery, is developed with the support of Edo State government. The technical director, Mr Tim Tian, said the fabrication of the refinery had been done in China and is awaiting inspection and approval by the DPR before they will be into Nigeria.
Tian explained that, while the local community will have a participating interest in the project, the idea is to build a mini LNG plant that will capture some flared gas, which will be processed into LNG and be used as fuel to power the power plant that will be used to operate the refinery.
While inspecting a modular refinery facility last Friday in Rivers state, acting director of the Department Petroleum Resources [DPR] Mr Ahmad Shakur, had said the Federal Government was passionate about the success of modular refineries in the nation’s oil and gas industry.
Shakur explained that the features for modular refineries are small capacity and simple process. Modular refinery is of advantage to Nigeria because its crude is light and sweet. By simple process, you can have good quality products from the crude that can be used in the local market directly, he stated.
“In China it is quite different because we are short of crude oil and the crude we have is small and sour. Therefore the cost of refining in China is higher than in Nigeria,” the DPR boss said
The Edo Refinery, when operational, will produce from its feedstock 50% of diesel (500,000 litres), 25% of naphta (300,000 litres and 20% of fuel oil (200,000) litres. The refinery will not be producing PMS presently because government regulates its price and it will not be economically viable to go into its refining.
Tian stated that it is because of regulation of the price of PMS (petrol) that those licensed by the DPR in the past to set up private refineries could not build. They (licensees) rather would choose to trade the crude than refine it in-country because government subsidizes PMS. Diesel can be refined in Nigeria because the price is deregulated.
AIPCC Energy Limited is a subsidiary of African Infrastructure Partners (AIP), a business group with interests in oil and gas, power, financial services, agriculture and technology.