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DPR shuts down 85 gas plants in Lagos for illegal operations

DPR has shutdown 85 LPG plants in Lagos from January to October of 2020, for engaging in illegal operations.

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FG directs 9,000 filling stations to install gas facilities, FG discloses when Nigeria will start exporting petroleum products, DPR closes seven gas firms in Lagos, plans to close more

The Department of Petroleum Resources (DPR) has disclosed that it effected the shutdown of 85 Liquefied Petroleum Gas (LPG) plants in Lagos from January 2020 to October 2020, for engaging in illegal operations.

According to a report from News Agency of Nigeria (NAN), the disclosure was made by the Zonal Operations Controller Lagos, DPR, Mr Ayorinde Cardoso, while having a chat with newsmen during a public sensitization exercise organized by the agency on Wednesday, November 18, 2020, on safe usage of LPG.

This is coming at a time of several reported cases of explosions by gas plants during the year in Lagos State with several fatalities and destructions of properties. Some of them were said to have either been operating in residential areas or without approval.

The DPR top official who said the move is to reduce the frequent occurrence of gas explosion in the state, revealed that the LPG plants were shut down due to their inability to comply with international safety standards and also operating without approval or licence from the DPR.

Cardoso who reiterated that the clampdown on those illegal plants will be a continuous exercise said the agency will sensitize the public on the importance of safe usage and distribution of gas.

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He said, ‘’We are doing this sensitization to tell the public that it is safe to use gas. It is an efficient and clean source of energy if used appropriately.’’

‘’We want to bring the gas sector to the citizens and deepen utilization of LPG for job creation and national development which is the aspiration of the Federal Government. We will be doing this exercise continuously in various parts of the state.’’

Although there have been several calls by the Federal Government and different stakeholders on gas plant operators to take necessary measures to ensure the safety of their operations, it, however, appears that these safety standards have not been observed by them. This has raised serious concerns amongst the general public and stakeholders.

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The Lagos State Government in a recent announcement banned the location of gas plants in residential areas.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

Nigeria’s 5,000 BPD refinery will produce 271 million liters of petrol every year

The operator of the newly commissioned refinery has disclosed that the facility will produce 271 million liters of petroleum products annually.

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Nigeria’s 5,000 BPD refinery will produce 271 million liters of petrol every year

Mr. Chikezie Nwosu, Chief Executive Officer of WalterSmith Petroman Oil Limited, the operator of the new refinery, has disclosed that the newly commissioned 5,000 BPD Refinery will produce 271 million liters of petroleum product annually.

This information was disclosed by Nwosu in his address during the commissioning ceremony of the 5,000 BPD Modular Refinery, in the Ibigwe Field, Imo State.

Mr. Nwosu disclosed that the refinery will refine 5,000 barrels per day of crude oil, and produce 271 million liters of petroleum product annually.

He added that since it commenced the evacuation of products in November 2020, it has already delivered 5 million liters of product into the Nigerian market.

(READ MORE: FIRS clarifies stamp duty charges, lists eligible transactions)

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While speaking at the ceremony, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote explained that the next phase of the project will be a 45,000 BPD Refinery, with a completion timeline of 24-30months. When completed, the Refinery will utilize 16 million barrels of crude oil annually.

He stressed that this is an impressive and avid step towards the board’s mandates of developing in-country capacities/capabilities to add value to Nigeria’s hydrocarbon resources.

The ES of NCDMB disclosed that the Federal Government’s target is that at least 10% of Nigeria’s crude and condensate production should be refined through modular refineries.

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What you should know

The refinery is one of the government’s investments in the oil industry, as FG’s investments in ongoing modular refinery projects so far amount to 80,000 BPD of combined modular refining capacity.

(READ MORE: Debt Management Office resumes FGN savings bond offer on August 10)

WalterSmith Petroman Oil Limited owns 70% of the Refinery being commissioned today, while the Nigerian Content Development and Monitoring Board on behalf of the Federal Government of Nigeria hold 30% equity of the refinery.

However, it is important to note that the Federal Government of Nigeria signed a Memorandum of Understanding (MoU) with the Niger Republic on the transportation and storage of petroleum products.

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Why this matters

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The refinery is a giant step towards the development of capacities and capabilities in the oil industry, especially in terms of local production of refined petroleum products.

The Refinery will strengthen local and indigenous investment in the oil industry and boost the production capacity of refined crude products in the country.

According to OPEC, Nigeria’s petroleum products import of $58.75 billion, outstrips the country’s crude oil export of $45.12 billion, at the end of 2019. This development is expected to reduce the importation of petroleum products in Nigeria.

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Energy

Port Harcourt Refinery to get a facelift in Q1 2021 – NNPC

NNPC is set to commence the second phase of the rehabilitation of the Port-Harcourt Refinery in the first quarter of 2021.

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NNPC reports explosion at OML 40 facility

The Nigerian National Petroleum Corporation (NNPC) is set to commence the second phase of the rehabilitation of the Port-Harcourt Refinery in the first quarter of 2021.

According to the African Business Intelligence Report, NNPC is working hard and round the clock towards ensuring that four refineries are up and running by 2023.

The Group MD of NNPC, Mallam Mele Kyari made this disclosure and said, “The vision of revamping the pipelines is in tandem with the Refineries Rehabilitation Project, which we have promised to deliver by 2023. I am happy to announce that the funding challenge which had stalled the second phase of the rehabilitation of the Port Harcourt Refinery has been resolved. The contract for the second phase will soon be awarded and work will commence in Q1 of 2021.”

According to Mallam Kyari, a lot has been put in place to boost exploration and production with a view of achieving 3m barrels per day production target.

(READ MORE: FG discloses when Nigeria will start exporting petroleum products)

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What you should know

Nairametrics had reported that the first phase rehabilitation was to take place 2 years ago and to be executed by Milan-based Maire Tecnimont S.p.A, in collaboration with its Nigerian affiliate, Tecnimont Nigeria.

It was expected that after the phase-1 of rehabilitation, the Refinery complex should be able to reach its 60% capacity utilization.
Further rehabilitation of the PHC refinery is expected to enhance its production capacity to meet its production targets

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Putting the refineries in good shape to produce optimally would stem down the huge imports of the refined petroleum products, considering that about 90% of the refined petroleum products consumed in Nigeria are imported.

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Energy

YULETIDE: Petrol scarcity not in sight according to PMS data – PPPRA

Petroleum Products Stock Data compiled by the PPPRA suggests there may not be any fuel scarcity this yuletide season.

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Subsidy and PIB, petrol price, PPPRA, We have sufficient PMS stock for 38 days- DPR 

It appears petrol scarcity is not in sight, at least during the coming yuletide season and in the foreseeable future.

This is according to the Petroleum Products Stock Data, compiled by the Petroleum Products Pricing Regulatory Agency (PPPRA).

According to the data available on the PPPRA website, the current stock level of Premium Motor Spirit (PMS), also known as petrol or gasoline, stands at 2.705billion litres.

READ: Port Harcourt Refinery to get a facelift in Q1 2021 – NNPC

  • Of the total litres, Land-based Stock accounted for 1.243billion litres, representing 46%.
  • Marine Stock accounted for 1.462billion litres, representing 54% litres.

Further checks indicated that NNPC and two other marketer’s association – MOMAN and DAPPMA, are in charge of the product. They operate in five designated areas – Lagos area, Port-Harcourt area, Calabar area, Warri area, and Kaduna area.

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  • Of the 1.24 billion Land-based Stock, NNPC owns 604.7 million litres, representing 49%.
  • DAPPMA owns 545.1 million litres, representing 44%.
  • Major Marketers own 93.7 million litres, representing 8%.

READ: Petrol price to increase further, FG to add strategic reserves’ management cost

Of the Marine stock of 1.46 billion litres,

  • 1.25billion litres belongs to NNPC and it’s offshore, while 215.59 million litres is total Jetty at Berth.
  • DAPPMA owns 131.38million litres of the total Jetty at Berth, representing 61%.
  • Major Marketers own 42.77million litres, representing 20%.
  • NNPC owns 41.44million litres, representing 19%.
  • Lagos area has the highest closing stock (596.20million litres), followed by Port-Harcourt area (212.43million litres), Warri area (198.29million litres), Calabar area (58.91million litres), and then Kaduna area (57.97million litres).

(READ MORE: NNPC to end oil-for-fuel swap system)

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  • As at the release of the data on November 22 by PPPRA, 10 out of 11 vessels discharged the 215.59 million litres at different Jetties, with the other vessel given nomination to discharge.

What this means

With the national average daily consumption of PMS put at 56 million litres, it means the current stock level of 2.71 billion litres will sustain the country for at least 48 days, all things being equal.

The only worry is affordability, considering the recent hike in petrol depot price by the Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

READ: UPDATE: Gas station explodes in Ipaja, Lagos, claims 8 lives, razes 25 houses, 16 lock-up shops

What you should know

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Nairametrics recently reported that the recent adjustment of the ex-depot price of petrol may result in increased pump price of the product. PPMC increased the ex-depot price of the product to N155.17 per litre from N147.67 per litre.

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READ: Local refining; A panacea for Nigeria’s reliance on imported refined products

The ex-depot price is the price at which PMS is sold by the PPMC to marketers, which indicates that marketers would be dispensing the product to motorists at a price higher than N155.17 per litre. Hence, the average current pump price of PMS is N170 per litre.

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