News Post
US grant to support development of Nigerian grassroots refinery
The US Trade and Development Agency (USTDA) has awarded a grant to privately held Eko Petrochem & Refining Co. Ltd. (EPRC) for a feasibility study to recommend technologies and develop an implementation plan for a 20,000-b/sd modular refinery to be built on Tomaro Island in Lagos, Nigeria.
EPRC will use the $1-million grant to fund the feasibility study, which will provide detailed engineering design and technical analyses required to advance the proposed project, according to separate releases from USTDA and the News Agency of Nigeria.
EPRC already has selected VFuels LLC, Houston, to execute the study, USTDA said.
While EPRC already has completed front-end engineering design and the environmental impact assessment for the proposed $116-million modular facility, the project will require an overall cash investment of about $250 million, which the company intends to raise from borrowing, equity investment, and potential private investors, said EPRC Chairman Emmanuel Ihenacho.
With the feasibility study scheduled to be completed soon, EPRC will next apply for an approval-to-construct permit from Nigeria's Department of Petroleum Resources (DPR), as well as all remaining regulatory approvals to move the project forward, Ihenacho said.
EPRC’s grant award from USTDA for the Tomaro Island greenfield refinery follows its 2015 award of one of the 25 licenses DPR issued 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 the use of modularly constructed refineries. (OGJ Online, June 22, 2017; OGJ, Jan. 2, 2017, p. 55).
In congratulating EPRC on the USTDA grant, Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, noted that finance remains one of the major challenges facing most of the private firms previously licensed to set up modular refineries in the country.
Broader Nigerian plans
The modular refining program joins a series of other initiatives by Nigerian National Petroleum Corp. (NNPC) to aggressively advance its rehabilitation-and-expansion program at Nigeria’s state-owned refineries in order to meet the country’s domestic demand for fuels and curb its reliance on foreign imports (OGJ Online, Jan. 24, 2017).
As part of its proposed $500-million rehabilitation program, NNPC in April 2016 launched a tender inviting bids from investors to become financial and technical joint-venture partners for the phased modernization of its four refineries, which in addition to Port Harcourt Refining Co Ltd.’s 60,000-b/sd hydroskimming and 150,000-b/sd full-conversion refining complex in Rivers State, include Warri Refining & Petrochemcial Co. Ltd.’s 125,000-b/sd refinery in Delta state and Kaduna Refining & Petrochemical Co. Ltd.’s 110,000-b/sd refinery in Kaduna state.
The overall rehabilitation program calls for restructuring the refineries to operate as incorporated JVs, with NNPC holding 51% interest and its potential partner 49% interest. If selected, partners will agree to fund, rehabilitate, and jointly operate the refineries with NNPC for a defined period, and in return, receive all offtake and marketing rights to refined products to be sold primarily in the Nigerian market until each partner recovers its investment.
Contact Robert Brelsford at rbrelsford@ogjonline.com.
http://www.ogj.com/articles/2017/08/us-grant-to-support-development-of-nigerian-grassroots-refinery.html
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