Domestic Refining’ll Annually Save Nigeria $5bn – Waltersmith
Waltersmith Group, an indigenous oil and gas firm, has said Nigeria can save up to $5bn annually by building domestic refining capacity.
The company, whose 5,000-barrels-per-day modular refinery in Imo State was inaugurated on Tuesday, also said domestic refining could boost the export promotion and import substitution strategy of the Federal Government.
It said the final investment decision for the 45,000bpd refinery it broke ground for on Tuesday would be taken in December, with an expected completion period of 24 months.
Waltersmith said in a document obtained by our correspondent that it had completed a feasibility study, front-end engineering design and initiated the engineering, procurement and construction contract tendering process.
According to the company, Nigeria consumes over 300,000 bpd of oil but produces 5.6 times that amount and has little domestic refining capacity.
It said, “Therefore, Nigeria is forced to re-import 20 per cent of oil exported, thereby losing an average of $40-$60/barrel re-imported in the process.
“Consequently, up to $5bn can be saved annually by building domestic refining capacity. Similarly, the 270 billion cubic feet of gas flared annually can generate up to 10,000MW of power.”
The Chairman, Waltersmith Group, Mr Abdulrazaq Isa, said the expansion project would be constructed in two phases, comprising a 25,000bpd and a 20,000bpd condensate and crude processing plants.
“We are now at the contract tendering stages and expect construction to be completed in about 24 to 30 months,” he said at the inauguration of the 5,000bpd refinery.
According to him, the combined products expected at full capacity would include Premium Motor Spirit and Liquefied Petroleum Gas, contributing about 2.7 billion litres of products per annum.
Isa said, “This represents 10 per cent of total refined products consumption in Nigeria and significant foreign exchange savings for the nation, as well as job creation for thousands of our people.
“A major enabler for lowering financing risks for the project is crude oil supply assurance. Whereas the phase-1 is relatively secured, we are still going through the motions to get the expansion phases to similar levels of comfort.
“As a matter of fact, we are faithfully progressing the next phases hoping that all residual challenges will somehow be resolved in a timely manner before completion and commissioning early 2023.”