[size=14pt]First Private Refinery Begins Operation in Rivers State[/size]
28 Nov 2011


Minister of Petroleum, Mrs. Diezani Alison-Madueke
By Ejiofor Alike

A private refinery owned by Niger Delta Petroleum Resources Ltd (NDPR), a subsidiary of Niger Delta Exploration and Production Plc, has begun operation in Rivers State.

The firm has also been granted a Licence to Operate (LTO) by the Federal Government.

Built at Ahaoda East Local Government Area of Rivers State, the refinery, which was completed in December 2010, has been undergoing test-run; while the operating licence was being awaited.

Fabrication work had started in January 2010 by Chemex Incorporated of Texas, California in the United States.

The operating licence gives the NDPR full authority to operate its mini-diesel refinery, referred to as “Topping Plant” at the company’s Ogbele Oil Field in old Oil Mining Lease (OML) 54, located in the state.

The NDPR’s operating licence, which was signed by the Minister of Petroleum, Mrs. Diezani Alison-Madueke, was the first of its kind to be granted to an independent, publicly-owned Nigerian company.

Confirming this development in an interview with THISDAY at the weekend, the Chief Executive Officer of Niger Delta Exploration and Production Plc, Dr. ‘Layi Adetona, said the refinery, which had an initial capacity of 1,000 barrels of crude per day, now produces 120,000 litres of diesel per day, using crude oil from the company's Ogbele Flowstation.

Adetona said with the operating licence, the refinery, which was installed to initially promote self-sufficiency in the company's operations, would now contribute to Nigeria's energy production by selling surplus diesel to independent fuel marketers for local consumption.

“Several years ago, we had the problem of cost. We saw a situation where we were spending so much money to buy diesel for our operations and we thought there has to be a process whereby we can cut that cost by building a small refinery.

“Now, with the deregulation of the market, it suddenly became attractive that it is not just having capacity to produce what we can consume but a little bit more. The plant that we have happens to satisfy that technical specification. So, we have not just achieved self-dependence, we also have excess capacity to commercialise the additional output that we have,” he said.

He stated that it was cheaper to refine petroleum products locally than to import from abroad, adding that the operating licence allows the company to operate the refinery and commercialise its products.

“We have 100 per cent full dependence on ourselves to supply diesel for all our operations and we still have excess capacity to sell the balance of what we produce. We produce about 120,000 litres of diesel daily and our daily consumption is less than one quarter of this figure. In effect, we can sell at least, three truck loads of diesel from our plant every day,” he added.

Adetona, who also encouraged other Nigerian independent companies and the multinationals to embark on similar projects, said the success of his company’s project was an indication that private refinery could work in Nigeria.

He stated that what enhanced the company’s case was that it was already producing its own crude oil from the Ogbele field.

He said the production of diesel had complemented the company’s gas processing capacity, as a Gas Processing Plant with a maximum capacity of 100 million standard cubic feet per day (MM scf/d) had been completed, to exploit the proven gas reserves in the Ogbele Field.

“The tail gas will be transported to the Nigerian Liquefied Natural Gas (NLNG) Train 6 at Bonny Island through NDPR’s gas pipeline, as part of a pioneering Gas Sales Agreement (GSA) between NDPR and the NLNG Joint Venture. NDPR is also well poised to contribute to the nation’s domestic gas quota while at the same time eliminating gas flaring in its operations,” he said.

The Federal Government had granted LTC to 22 private investors in 2002 but later cancelled the licences for non-performance. However, the affected investors had cited non-deregulation of the downstream sector as the reason for their non-performance.

http://www.thisdaylive.com/articles/first-private-refinery-begins-operation-in-rivers-state/103803/

Its a small refinery, but the first small steps in the right direction for Nigeria. Nice one!

I see, they want to start by selling surplus diesel to marketers. That sounds plausible especially as they may have challenges with petrol pricing.

Good.

Ok oo we yaave hear o, GEJ IS WORKING, BOKO HARAM Is working.

Okay, they will be producing only Diesel because the Diesel Market is fully deregulated otherwise, if they venture into PMS, it is impossible for them to sustain their business under the current fuel regime in Nigeria!

However, I wonder how they will only produce Diesel without distilling PMS!!!

rolchi:

Okay, they will be producing only Diesel because the Diesel Market is fully deregulated otherwise, if they venture into PMS, it is impossible for them to sustain their business under the current fuel regime in Nigeria!

However, I wonder how they will only produce Diesel without distilling PMS!!!

I wonder as well. Maybe there is now an inverse fractionating process. Even at that, PMS would still be a by product.

Deregulation is the way to go and removal of subsidy is necessary to drive private investments in refineries.

Nice development.

As for subsidy removal, it's just a matter of time.

FACE:

I wonder as well. Maybe there is now an inverse fractionating process. Even at that, PMS would still be a by product.

Deregulation is the way to go and removal of subsidy is necessary to drive private investments in refineries.

this is great news, how about reserving a bit of crude oil for local consumption, since opec even regulates what we export,

2million liters - 120,000 = Foolishness, GEJ, this is not the height of your stupwidity, common u can do better

Interesting. How long did it take for the refinery to be completed. Anybody know?

Nice one!!!

Its about time.

We pray the cartel will not sabotage it

If only government refineries could be made to produce at 100%, then the issue of fuel subsidy will be a thing of the past. As there will be no need for fuel subsidy again.
GEJ God will give you the wisdom, to this new refinery more strength to your elbow.

NICE ONE

kizito96:

We pray the cartel will not sabotage it

amen

The ugly face of corruption in Govt. I wonder what her take was in this deal

^^Any need for making unwarranted statements?

en guys

yes,

this is very correct, it now produces 3 trucks per day for the public.

wld have posted pic , but due security reasons.

nice one

rolchi:

Okay, they will be producing only Diesel because the Diesel Market is fully deregulated otherwise, if they venture into PMS, it is impossible for them to sustain their business under the current fuel regime in Nigeria!

However, I wonder how they will only produce Diesel without distilling PMS!!!

FACE:

I wonder as well. Maybe there is now an inverse fractionating process. Even at that, PMS would still be a by product.

Deregulation is the way to go and removal of subsidy is necessary to drive private investments in refineries.

+100
best comments so far. R u guys chem or petrol engrs.?
The more reason why this subsidy should go @least orient in anambra and oda private ones will spring up and compete wit d govt owned refineries.

Ijogz K:

2million liters - 120,000 = Foolishness, GEJ, this is not the height of your stupwidity, common u can do better

to b ignorant is not a crime but when u advertize it, it bcomes one.
Read d article again.

rolchi:

Okay, they will be producing only Diesel because the Diesel Market is fully deregulated otherwise, if they venture into PMS, it is impossible for them to sustain their business under the current fuel regime in Nigeria!

However, I wonder how they will only produce Diesel without distilling PMS!!!

FACE:

I wonder as well. Maybe there is now an inverse fractionating process. Even at that, PMS would still be a by product.

Deregulation is the way to go and removal of subsidy is necessary to drive private investments in refineries.

+100
best comments so far. R u guys chem or petrol engrs.?
The more reason why this subsidy should go @least orient in anambra and oda private ones will spring up and compete wit d govt owned refineries.

Ijogz K:

2million liters - 120,000 = Foolishness, GEJ, this is not the height of your stupwidity, common u can do better

to b ignorant is not a crime but when u advertize it, it bcomes one.
Read d article again.

Good new, More to come. Nigerians are taking the bull by the horn. We need to develop our resources by our self.

please make use of your head while thinking and not your legs, so those who only visit NL to badmouth any project for the sake of badmouthing please if you have nothing upstairs just view and learn its not a must for everyone to make comments. Its a good effort no doubt I have always been thinking of mini refinery instead of large one; we should imagine have small refinery in at least every state or local government, jobs will be created and lots of raw material will be available for local usage; I feel the government should think MINI instead of MEGA, what do you think?

Praise the lord! Our salvation is the way.

120,000 litres of diesel = roughly 4 trucks of diesel. so small, i don't know if there is a cause to celebrate or make it front page news. step in right direction though

Novaman God bless your line of reasoning!Let GEJ encourage more mini refinery for a period of two tears then he can remove fuel subsidy-afterall there are many backyard refineries all over the south south

^
if fuel subsidy is not removed, even this small refinery will close down cus they cant b producing on desiel, since desiel is already deregulated.
Lets deregulat PMS too and oda private refineries can spring up

Funkymallam:

^
if fuel subsidy is not removed, even this small refinery will close down cus they cant b producing on desiel, since desiel is already deregulated.
Lets deregulat PMS too and oda private refineries can spring up

Haba aboki

we are not saying subsidy should not be removed, but the necessary infrastructures are not in place for the government to remove subsidy yet.

How can subsidy be removed when we don't have our own refinaries that produce our own consumptive rate of crude oil. Aboki, no one has to be a chemical or economist to know this.

Funkymallam:

^
if fuel subsidy is not removed, even this small refinery will close down cus they cant b producing on desiel, since desiel is already deregulated.
Lets deregulat PMS too and oda private refineries can spring up

There is no reason why the refinery can't survive on diesel production alone.  In fact, it should concentrate on diesel because the product has been deregulated and theirs should be cheaper than imported diesel.  Or do you want them to survive on subsidized petrol?

alj_harem:

Haba aboki

we are not saying subsidy should not be removed, but the necessary infrastructures are not in place for the government to remove subsidy yet.

How can subsidy be removed when we don't have our own refinaries that produce our own consumptive rate of crude oil. Aboki, no one has to be a chemical or economist to know this.

I understand what you're saying but there's no way investors will invest when the business model is unsustainable. On the other hand, the government can't just completely remove subsidy overnight as the shock will be too great for the average family to bear and might even cause inflation.

I think the government needs to set a ceiling price before deregulation and then allow any investor to come in by lowering the licensing requirements. This will allow for adequate competition that may force down the price ceiling. If the licensing requirements are too high, it will turn into another cement industry (cartels).