The Federal Government has concluded plans to issue 23 licences to establish modular mini refineries in order to increase local refining capacity.
The Director, Department of Petroleum Resources (DPR), Mr. Mordecai Danteni Baba Ladan noted that it was part of President Muhammadu Buhari’s commitment to reposition the petroleum industry so as to ensure that there was ready availability of petroleum products.
According to him, the three licensing stages that must be sequentially and meticulously followed before a process plant can be commissioned for operation are: a licence to establish, a licence to construct the plant, and a licence to operate the plant whether for a petroleum refinery, petrochemicals and gas processing plant.
The validity of the licence to establish a refinery or plant will be for a period of two years, after which it will lapse.
Mini refining is interesting because of its relatively low setup cost ($100-$250 million), when compared with full conversion refineries (with capacities of 200,000 bpd) whose cost will be between $2 – $9 billion.
It offers the flexibility of quick and easy upgrade to reflect changes in product demand, according to SweetCrudeReports, which offers reviews on the Nigerian Energy Industry. An initial 30,000 bpd capacity refinery can be upgraded to double or triple the capacity with ease and speed. New demands can be easily met with the addition of new modules.
Mini refineries also eradicate the logistical, supply chain problems and risks associated with a single large scale plant
It however cannot achieve the same scale and efficiency obtainable from a full conversion plant and will typically require more personnel per Effective Distillation Capacity (EDC), says SweetCrudeReports.
