Oando PLC, Nigeria’s leading integrated energy group, has taken a bold step in its commitment to end Nigeria’s petroleum products supply shortages, with the completion of a comprehensive 4-month bankable feasibility study for an ultra-modern 240,000 barrels per day (bpd) Greenfield refinery in Lekki Free Trade Zone, Lagos. This is the first phase in the development of a 360,000 barrels bpd capacity refinery project.
The ‘bankable’ feasibility study, which affirms a positive outcome for the project, was conducted by Wood Mackenzie and Foster Wheeler, renowned global energy solutions firms. Covering both the marketing and technical aspects of the proposed refinery, this set of complex studies reviewed long term demand and supply projections, included capital cost estimates, an economic evaluation and a positive outcome for the implementation plan of the project.
Mr. Ayo Ajose-Adeogun, Chief Executive Officer, Oando Refinery & Terminals said: “Oando’s effective execution, and our strict operational controls have resulted in several successful projects in the past, and we are taking deliberate steps to ensure the refinery project is likewise implemented flawlessly. This is evident in the detail of this feasibility study and the choice of world-class vendors.”
In preparation for developing the refinery, and to improve the efficiency of the project, Oando has completed a separate feasibility study and is on the verge of commissioning a Front End Engineering Design (FEED) for a world-class finished products reception terminal in the same location. The terminal will be best-in-class and the largest product terminal in Sub-Saharan Africa, serving as the first phase of the refinery development.
The project’s next steps are the sourcing of finance, environmental impact assessments and the securing of all necessary regulatory approvals. Oando will now commence engagements with Federal and State government agencies.
Nigeria’s shortfall of at least 16 million litres per day of petrol justifies the economics of a refinery project. In the last seven years the nation’s four existing refineries mostly operated at an average of 37% capacity utilisation. The nation requires about 47 million litres of refined petroleum products daily to sustain economic activities. The current daily output of Nigeria’s existing refineries is far from meeting the demands of a growing economy.
“That’s why Oando has taken the initiative to bridge the supply gap by providing the economy with sufficient refined petroleum products with the aim of reducing the nation’s dependence on imports”, Mr. Ajose-Adeogun added.
Commenting on the project, Mr. Wale Tinubu, Oando’s Group Chief Executive says; “This study is the first step in revolutionising Nigeria’s refining landscape. We now have the blueprint to guide us in developing sub-Saharan Africa’s most sophisticated and advanced refinery. This refinery will complete our integrated energy solutions status, allowing us to extract optimal value at every point along the energy chain, irrespective of the vagaries of the oil and gas market.”
“With a refinery physically close to high quality crude, a huge local market and technology sophisticated enough to produce premium refined products, ours will be one of the most competitive operations in the world. Though a project of this magnitude is unprecedented in this region, we are confident that we will be able to attract financiers due to competitiveness of the refinery, the quality of this study and our brand reputation”, Mr. Tinubu concluded.
