FG commences converting illegal refineries to modular
From Juliana Taiwo-Obalonye, Abuja The Presidency has disclosed that plans to convert illegal refineries to modular ones are on.
According to a statement by the Senior Special Assistant on Media and Publicity to the Vice President, Laolu Akande, the plans are part of President Muhammadu Buhari’s new vision for oil-producing communities in the Niger Delta.
He said the modalities are being worked out to explore how some of the illegal refiners and the local communities in the region can become shareholders in the proposed Modular refineries concept of the Federal Government.
A modular refinery is a refinery made up of smaller and mobile parts- (skid-mounted)- that are more easily fabricated and can be more quickly transported to site. They come in different sizes with varying capacities normally lower capacity than conventional refineries with more elaborate and complication set-up. Under the plan being considered in the presidency, the Federal Government could supply crude to the local refineries at a reasonably considered price, as an incentive to stop the current practice whereby the illegal refiners vandalise and steal the crude. This concept would also prevent the environment degradation that the spills and damaging the trunklines have been causing.
Also, marginal field operators can also supply crude to the new modular refineries that would have the illegal refiners integrated.”
“The consideration going on now is subsequent to the promises made by the Federal Government during the presidential interactive engagements in several oil-producing States led by the Vice President Yemi Osinbajo to integrate the illegal refiners, rather than a scorched-earth policy that seeks to eliminate the operations of such refiners”, the statement read. Some of hurdles to be crossed are especially issues around the engineering and technical ramifications of such a conversion as well as financial models that would be workable and profitable. According to the statement, specific consideration on how to integrate local “illegal” refiners in the oil-producing communities into the Federal Government’s proposed modular refinery concept is now in progress with the Presidency and the Nigeria Sovereign Investment Agency, NSIA, spear-heading efforts.
The issues around technical and engineering implications of how to integrate the refiners were discussed last week with industry experts and practitioners making presentations on how to implement the modular refinery a brain child of Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources. The experts are working closely with the NNPC, Oil and Gas operators, owners of marginal fields, operators of refineries and various technical services providers to develop a workable system to develop this initiative. Another important component of the plan under consideration is to involve the current illegal refiners and their communities as shareholders while the NDDC and the NSIA will also hold substantial holdings/equity sufficient to make the smaller refineries operational as a business and a going concern. To facilitate effective community engagements, an MOU would be established under the plan with the affected communities determining the communities share, while the FG would supervise the implementation, which would be driven largely by industry operators and the communities.