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.
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