The
quest by Africa’s richest man , Aliko Dangote to make an intervention in
Nigeria’s long standing fuel supply hiccups is being pursued vigorously with
advance orders believed to have been made for equipment that will be used to build his proposed $8
billion refinery and petrochemical plant in Lekki, Lagos.
It
was learnt yesterday that the orders for these equipment were made ahead of
government granting a Licence-To-Establish (LTE) a refinery which Dangote
received only a few days ago.
The
equipment ordered include ‘Long Lead Items’ and a power plant, which ordinarily
would take between 18 and 21 months from
time of order to time of delivery.
It
is anticipated that these advance orders may cut short the take-off time of the
project.
The
Dangote Refinery and Petrochemical Plant is scheduled to become
operational in
the third quarter of 2017 and would have the capacity to process 400,000
barrels of petroleum per day.
Industry
watchers say the establishment of the refinery would bring significant relief
to the fuel supply situation in the country, save scarce foreign exchange,
create jobs and serve as a platform for skills acquisition for the local
workforce. It should also add to the purse of Aliko Dangote who is already
Africa’s richest man.
Nigeria
currently consumes 40million litres per
day of premium Motor Spirit (PMS) otherwise known as petrol, the bulk of which
is imported from Europe because the country’s four refineries are hardly functional
much of the time.
The
company is said to have before now concluded the re-settlement of communities,
land clearing and site surveys for the
project. Real construction work is expected to now start in earnest.
The
licence was issued to the company by
the Department of Petroleum
Resources (DPR ) and basic
engineering work is expected to be completed in January next year.
The
next step would be detailed engineering
work, which would involve structural, mechanical, civil and electrical
aspects and procurement.
Commenting
on the development, a stakeholder in the downstream sector of the oil and gas
industry who does
not want his name mentioned, said
it portends well.
‘’
It is a good development because I have always said that the private sector
must be allowed to do the business of petroleum refining. However, some
questions must be asked.What price is the company going to sell the products at? What price is
the company going to buy the crude oil from government at?”
He
added that if the company is going
operate at the Export Processing Zone
(EPZ) ,it would mean that it would sell the products at the going international price, which he said
would end up higher than current pump price.
Muda
Lawal, director-general of the Lagos
Chamber of Commerce and Industry, said
it is a welcome development that a major private investor is taking part in the downstream sector,
especially in refinery. “Over the years
the government did not have the capacity to run refineries, hence the huge sums
spent on the importation of refined products that have been putting pressure on
the nation’s foreign exchange”.
He
said the Dangote Refinery deserves to be supported, even as he cautioned that a
major reform needs to take place in the downstream sector before such
investment can be sustained.
“The
downstream must be deregulated for such investment to be sustainable”, he said.
UOP,
the oldest refining technology licensor in the world, which supplies refinery
licences across the globe is the architect of the technology being put in
place, while Engineering India Limited (EIL) is doing the detail engineering
work on the refinery.
The
Indian company was awarded a $139 million contract by the Dangote Group.
Businessday
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