First private refinery begins operation in Nigeria

The refinery produces 120,000 litres of diesel per day

First private refinery begins operation in Nigeria

A private refinery owned by Niger Delta Petroleum Resources Ltd (NDPR) in Nigeria, a subsidiary of Niger Delta Exploration and Production Plc has begun operation in Rivers State in southern Nigeria.

The firm has also been granted a Licence to Operate (LTO) by the Nigerian Government.

Background

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.

Operating licence

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.

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.

He said: “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.”

He also 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.

He further said NDPR is well poised to contribute to the nation’s domestic gas quota while at the same time eliminating gas flaring in its operations.

The Nigerian Government had granted LTC to 22private 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.

NP/Adekusibe/Ekata