The Federal Government on Monday sealed a $4.5 billion (N700 billion) Memorandum of Understanding (MOU) with a consortium of local and foreign investors called Petroleum Refining and Strategic Reserve Limited, to construct six new modular refineries in the country.
These refineries would bring the number of new refineries to be built by the Federal Government in partnership with various groups to nine; with the Nigerian National Petroleum Corporation (NNPC) and another consortium of investors already committed to the construction of three refineries in Kogi, Bayelsa and Lagos states.
When completed, the six new refineries, to be constructed in the next 30 months, with combined installed capacity of 180,000 barrels of crude oil per day, are expected to produce up to 30 million litres per day of refined petroleum products. Two of the refineries will be completed within the next 12 months with prospects of adding about 10 million litres to local refining capacity for petrol, diesel, kerosene and low pour fuel oil products.
The refineries will first be built in the US, tested, dismantled, shipped to Nigeria and then re-assembled.
The Minister of Trade and Investment, Olusegun Aganga, said, at the formal signing of the agreement in Abuja on Monday, that the deal is one of the direct results of the investment attraction component of the on-going transformation agenda of the Federal Government. Mr. Aganga said his ministry in collaboration with the NNPC would provide all the necessary policy framework and technical support to the consortium to ensure the actualisation of the projects.
“Apart from the power sector, one of the critical areas which President Goodluck Jonathan has made a priority is to have functional refineries. By the time the whole project is completed, the cost is estimated at about $4.5billion,” Mr. Aganga said.
“This is the beginning of the change in our old paradigm of exporting just raw materials and exporting jobs to the Western countries. This is something that we have done as a country for so long time. There is no nation that has moved from being a poor nation to a rich one by exporting raw materials without having a vibrant industrial base. That is what we have to change for us to be a rich nation,” the minister further stated.
The Chairman of the consortium , Edozie Njoku, said that the consortium would work with its foreign technical partners and the country’s regulatory authorities to ensure the successful completion of the projects within the stipulated timeframe.
The Vice-President/Director, Vulcan Petroleum Resources Limited, Jim Mansfield, said the investment is a testimony that “Nigeria is a good place to do business”, adding that “the funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business .We also believe that Nigeria is open for business”.
Details of the terms of the MOU show that it would take approximately six months to construct each refinery in the USA, one month to test and dismantle the refinery for shipping, while another one month would be used for the shipment of the refinery complex to Nigeria.
It is expected that it would take about four to five months to re-assemble the refinery in Nigeria and commence full production.