10 January 2018

Nigeria: Edo, Chinsese Firm Seal 5,500bpd Modular Refinery Deal

The Governor of Edo State, Godwin Obaseki, on Wednesday in China signed a Memorandum of Understanding (MoU) with a Chinese consortium for a 5,500 barrel per day modular refinery in Edo State.

The event is coming hours after a similar MoU was signed with China Harbour Engineering Company Ltd. in Beijing, China, for the development of the Gelegele Seaport in Edo State.

The Chinese consortium that will handle the modular refinery is made up of Peiyang Chemical Equipment Company of China (PCC), a world leading modular refinery company; Sinopec International Petroleum Service Corporation (SIPS) which is a subsidiary of Sinopec, the top chemical giant in the world and African Infrastructure Partners, AIP, a Nigerian infrastructure company.

The first phase of the project will be ready within twelve (12) months after all the necessary approvals are granted by the regulatory authorities.

The MoU signing ceremony for the refinery took place at SINOPEC headquarters in Beijing, China, and was witnessed by officials of the Nigerian Embassy in the Asian country as well as staff of SIPS Nigeria, a major local fabrication company, with a branch in Benin City, Edo State.

Speaking at the event, Mr. Obaseki expressed his delight at the local content component of the deal, which will ensure that Edo citizens are trained in welding, refinery operation and fabrication works to enable them participate in the construction of the refinery as well as its operation, post-commissioning.

The governor assured that the refinery construction will provide jobs for several unemployed Edo youth including the Libya returnees who are being evacuated from the crisis-ridden North African country.

Mr. Obaseki added that the modular refinery will solve the problem of inadequate petroleum products in the country and will turn Edo State to the preferred source of petroleum products considering the gateway status of Edo State to other parts of the country.

"With the federal government of Nigeria's commitment to support communities in the Niger Delta states to set up modular refineries, the SIPS fabrication yard in Benin City is expected to be very busy handling the fabrication jobs of modular refineries in the Niger Delta Region," Mr. Obaseki said.

He pledged that his administration will provide community support to the project, assist in securing all regulatory approvals from the appropriate regulatory authorities such as the federal ministry of petroleum resources.

The consortium is committed to delivering phase 1 of the project within 12 months of receiving the required regulatory approvals.

In addition, PCC also agreed to finance the demonstration modular refinery up to 70 per cent, thereby assisting in scaling the financing hurdle that has militated against the development of modular refineries in Nigeria.

The project will be executed in two phases; phase 1 consisting of 500 bpd demonstration refinery and phase 2 consisting of a 5,000 bpd capacity refinery. The PCC will also serve as the Operations and Management company that will manage the refinery before transferring it to the local investors.

The demonstration refinery will serve as, "proof of concept and to train the indigenes in the management of the refinery."

Nigeria

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