FG to save $10 billion, signs $25bn refineries’ deal with Chinese group




The Nigerian National Petroleum Corporation (NNPC) said on Tuesday three new refineries will be on-stream by 2014, following a deal signed with China State Construction Engineering Corp (CSCEC) in May.


The three refineries will have a combined capacity of 885,000 barrels per day (bpd) and will cost $25 billion. Previously, NNPC said the three refineries would have a capacity of 750,000 bpd and cost $23 billion. The three refineries are to be sited in Lekki, Lagos; Brass in Bayelsa State, and Ajaokuta in Kogi State. On completion, the three Greenfield refineries will position NNPC to engage profitably in the international trading of refined petroleum products.


Nigeria will also save over $10 billion annually from ending the era of imported refined petroleum products and an estimated $1 billion from the importation of fertilisers and chemicals.In addition, the new plants are capable of generating direct and indirect employment for an estimated 20,000 Nigerians covering the periods of construction and operations.


Speaking in Lagos, Billy Agha, an executive director of NNPC, said the participation of the corporation in the projects would position it to engage profitably in international trading of refined petroleum products. “In addition, the petrochemical complex will source natural gas from the Nigerian Gas master plan to produce polymers, solvent and particularly, gas-based fertilisers that are required to boost Nigeria’s agricultural production”, he said.


He said the new refineries would reinforce the ongoing oil and gas reforms in Nigeria, which are primarily symbolised by the Petroleum Industry Bill (PIB) soon be passed into law and the imminent deregulation of the downstream sector of Nigeria’s petroleum industry.


NNPC aims to accelerate the construction of the new refineries to stem the flood of imported refined products into the country while the Chinese company plans to expand its influence into Africa and establish its foot prints firmly in the oil and gas sector of the country.An industry source told BusinessDay that the investors are emphatic on the areas where logistic problems would be highly minimised such as easy access to coastal locations and a place that has large market for refined petroleum products.


The source said the corporation would want the investors to be involved in the construction of the plants unlike the situation with the existing refineries that were built by different companies for the NNPC to run. Based on these conditions, the investors are said to have now zeroed in on Lagos, Bayelsa and Kogi. But Lagos seems to be top on the list of areas considered for the project in which they would be greatly involved because of the relative security enjoyed by the state and its large coastal line that would not constitute logistic problems.





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