By Adewale Sanyaolu

Nigeria’s quest to attain energy security and efficiency again caught the attention of President Muhammadu Buhari during the recent inauguration of the  $1 billion Pinnacle Oil and Gas FZE ultramodern offshore subsea petroleum intake and offtake terminal at the Lekki Free Zone in Lagos. Buhari at the event restated that the “Provision of energy security remained a cardinal points of our administration.

We have recognised that the seamless supply and distribution of petroleum products is challenged by infrastructure deficit and complicated by the congestion in the Apapa areas of Lagos since the start of our administration in the year 2015,’’.

The president’s statement was inline with the stance of the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari, who at a recent a live interview on Arise Television, stressed the need for Nigeria to develop a framework on energy security in order to diversify its sources of petroleum products supply and secure all such sources.

According to him, the massive population of Nigeria, where 70 per cent of the people are predominantly youths, poses a challenge to the energy security of the nation.

“For example, when there is a minor scarcity of petrol, it affects several things and several people because of our large population size and shortage in the supply chain of petroleum products. So there is a need to secure our sources of petrol supply at all times, which calls for the need to develop a framework where energy security is guaranteed.

The views expressed by Kyari during the interview were equally re-echoed by him at the  Pinnacle Oil facility unveiling in Lagos recently.

The facility is made up of a Single Point Mooring (SPM) and the Conventional Buoy Mooring (CBM) facility including a storage facility of between 300 million to one billion litres of petroleum products capacity.

According to him, the massive growth in today’s Nigerian economy requires energy, adding that facilities like the Pinnacle terminal would become very primary in the journey towards energy sufficiency and security.

NNPCL drums support for Pinnacle Oil investment

Kyari described the Pinnacle terminal as the largest exit point for petroleum products currently in Nigeria, adding that the facility has clearly demonstrated capacity by easing delivery of petroleum products in many parts of the country and during difficult situations.

“We have transformed, we are a commercial company, we have partners, and one of the great partners that we have is Pinnacle Oil and Gas. Without mincing words, this is the largest exit point for petroleum product that we have today.

“We will always remember that the exit point that will work for us in recent times is the Pinnacle facility. I congratulate you Peter for great work done, and for us at NNPCL, we will continue to partner with you and other stakeholders, other investors in this space as we continue to provide energy security for our country, which is very critical for all of us.

“All this wouldn’t have happened except there is an enabling environment. That enabling environment was surely created by Mr. President in the last seven years by allowing regulation to work, by allowing investors to have access to financing, supporting them in every way, and also bringing a framework which culminated in the Petroleum Industry Act (PIA) coming in place to make sure that business works in the energy sector.”

Kyari said NNPC sees a great opportunity unfolding, particularly for Lagos with growth in population and as well as the substantial growth in energy requirements despite the conversations around energy transition.

According to him, the massive growth in today’s Nigerian economy requires energy, adding that facilities like the Pinnacle terminal would become very primary in the journey towards energy sufficiency and security.

Kyari noted that the largest concentration of downstream facilities was in Lagos and that they rely on Lagos to have energy security in the coming years while they continue to diversify in the best interests of Lagos because of the associated challenges, which the Pinnacle facility has helped to resolve.

Relief for Apapa gridlock

President Muhammadu Buhari  while  inaugurating the Pinnacle Oil and Gas FZE Terminal disclosed that the operations of the facility have eased congestion in the Apapa area, and reduced the cost of delivery of petroleum product distribution to many parts of the country.

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The president congratulated the Chief Executive Officer of Pinnacle Oil and Gas Limited, Mr. Peter Mbah, for establishing the massive terminal facility and providing hundreds of jobs to Nigerians.

Buhari described the investment as a demonstration of the success of his administration’s agenda to transform the nation’s economy, adding that the federal government looks forward to many more investments of this magnitude.

He reiterated that the federal government would continue to encourage and support investors to take advantage of the ongoing reforms in the oil and gas sector as enshrined in the Petroleum Industry Act (PIA) and replicate the feats achieved by Pinnacle Oil and Gas Limited.

Some of the stakeholders at the inauguration ceremony maintained that the facility would significantly transform Nigeria’s downstream sector having addressed the challenges hitherto experienced with multiple handlings associated with discharging products from mother vessels through Daughter vessels with attendant delays, high costs and gridlock in Apapa.

Corroborating the views of Buhari, Governor of Lagos State, Mr.Babajide Sanwo-olu, said the Pinnacle terminal in the lekki Free Trade Zone was another landmark private sector investment in Lagos State -the state of aquatic splendour in the commercial and economic nerve center of the country.

“What this means is that vessels that wouldn’t come around here, 90,000 deadweight (DWT) tons, and 150000 DWT can conveniently berth here and discharge their products effectively within the minimum turnaround. There is no need for smaller ships to be deployed to transfer products to and from larger vessels which was often very necessitated at many other parting locations, which I’m told can take as long as 30 to 45 days.

On the other hand, the direct transfer that is possible here can be done within a maximum of two days,” he added.

In addition, the Lagos Governor noted that the facility could store up to 300 million litres of refined petroleum products, maintaining that by all standards, “this is an impressive, audacious facility built to the highest standards available anywhere in the world.”

According to him, what is even more interesting is that, it’s only the first phase of a larger plan that is out there, which will have a capacity to store as much as a billion litres of petroleum products.

Facility to halt N5bn daily loss

Mbah said with the infrastructure the company has put in place, it had been able to address the delays in evacuating products in mother vessels that come to Nigeria.

Mbah also explained that the extra costs companies pay and the reduction in revenues that should be made through Custom Duties and Excise Duties as well as revenues to the Nigerian Ports Authority (NPA) have also been addressed.

He noted that one of the major benefits of the facility was to help to decongest the Apapa and the roads by reducing the time in evacuating products in mother vessels and increasing turnaround time, thus significantly eliminating demurrage and waste due to inefficiencies in the value chain.

“I read one time in your reports that the country was losing about N5 billion daily because of that gridlock in Apapa. That’s because we are unable to evacuate dry cargoes that are in the port.

“The implication of that is, if you cannot move the dry cargoes, you cannot bring in new vessels. So the earnings that government was supposed to be making from Customs duty and excise duty and the NPA fees and all that stalled.

“And then, the fees to pay for Nigeria-bound vessels went up almost 10 times because those vessels will reckon with the fact that when they get to our waters, they will have to wait for several days before they are allowed in. And they will pass that cost to Nigerians,” Mbah said.

According to him, with the reduction of the gridlock in Apapa, when the company’s facilities begin operations, there would be free movement of dry cargoes.

“Those vessels that would ordinarily wait for days if not months before they come into our port will be reduced, the number of waiting period will be reduced. It will impact on the freight costs.

“Also, the revenue of the government both the Customs and NPA will also be enhanced because you know the fast movement of those cargoes. So that’s how it impacts the economy,” he maintained.