The government of Nigeria’s Edo state has signed a memorandum of understanding with a consortium of Chinese and African companies to build what could become the state’s first refinery.
Signed in Beijing on Jan. 10, the MOU covers construction of a 5,500-b/d modular refinery to be built in two phases by a consortium of China Petrochemical Corp. (Sinopec) subsidiary Sinopec International Petroleum Service Corp. (SIPS), Peiyang Chemical Equipment Co. (PCC) of China, and Nigeria-based African Infrastructure Partners, the Edo government said.
The first 500-b/d phase of the project would be completed within 12 months following all necessary approvals by Nigerian regulatory authorities, with the second 5,000-b/d phase to follow sometime thereafter.
Alongside agreeing to provide up to 70% financing for the refinery’s first 500-b/d phase, PCC also will serve as operator and manager of the refinery before ultimately transferring it to unidentified local investors, the state government said.
The planned refinery comes as part of the Nigerian federal government’s initiative to install modular refineries to help meet the country’s rising demand for petroleum products as well as the state’s effort to establish itself as a viable gateway for product supply to other Niger Delta states, according to Edo Gov. Godwin Obaseki.
A definitive timeframe for start of construction on the project has yet to be determined.
Announcement of the government-proposed refinery follows a previous announcement by US businessman Charles Ihaza he acquired about 453.9 hectares of land in the Ovia North East Local Government Area of Eghudu, Edo, to establish a more than $2-billion modular refinery capable of producing more than 80,000 b/d of finished products, Nigeria’s federal news agency said on Apr. 28.
Further details regarding the two projects have yet to be disclosed.
The proposed refinery projects come in the wake of Nigeria's Department of Petroleum Resources (DPR) award in 2015 of 25 licenses to private investors to establish refineries in Nigeria as part of the federal government’s strategy to expand the country’s existing refining capacity through use of modularly constructed refineries. (OGJ Online, June 22, 2017; OGJ, Jan. 2, 2017, p. 55).
Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, previously said that finance remains one of the major challenges facing most of the private firms previously licensed to set up modular refineries in the country (OGJ Online, Aug. 21, 2017).
Contact Robert Brelsford at [email protected].