Bayelsa Keys into FG’s Proposal to Bankroll New Modular Refineries

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Chineme Okafor in Houston, Texas

Governor of oil-rich Bayelsa State, Mr. Seriake Dickson, has disclosed that the state may be the first of the nine Niger Delta states to independently adopt the federal government’s plan to build modular refining units in each of the oil producing states, with its plan to fund one.

Dickson told journalists at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States, that the state government has set up a special purpose investment company to undertake this.

He stated that Bayelsa could commit as much as $2 million to build and run one modular refinery in state, and equally partner with private investors on this.

As part of its larger development plan for the oil-rich but volatile Niger Delta region, the federal government had pledged to build modular refineries in each of the states.

Vice-President, Yemi Osinbajo had on March 25 stated that the proposed modular refineries would be sited only in oil-producing areas to address the developmental challenges reportedly from years of neglect.

Dickson however stated at the conference: “We want to take advantage of the new initiative rolled out by the federal government. We have set up a state owned company that will be the special purpose vehicle wholly owned by the state but we are open to partnership with (the private sector).”

He further stated: “We will committed a percentage of it (for construction). I am told that setting up one of these will cost one to two million dollars but if it is one, we should be able to even do it. And to guarantee sustainability and maximum productivity we will like to work with the private sector because government is not a good entity.”

Meanwhile, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said that the launch of the economic recovery and growth plan by the government would provide strategic economic partnerships and investment openings worth about $50 billion, most of which would be in the country’s oil and gas sector.

Kachikwu said this while wooing investors at an event organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Houston.

The minister said: “The Federal Government of Nigeria has launched a national economic and growth plan for the next four years; this is anchored on the Nigeria oil and gas roadmap among other sectoral roadmaps.

“This roadmap presents exciting opportunities for financial and strategic partnerships in excess of $50 billion (about N1.58 trillion).”

According to him, “About $13 to $17 billion would go to the upstream for the development of upstream gas fields with a total of 37.4 trillion cubic feet. $14 to $17 billion would go to the Trans-Nigeria gas pipeline project, gas revolution industrial park at Ogidigben and three power plants for additional 3.2 gigawatts (GW) (3200 megawatts) capacity in the gas and power sector.”

He further said: “$2.5 to $5 billion would be invested in the licensing and establishment of several modular refineries, co-locating a refinery within Kaduna Refining and Petrochemical Company (KRPC) and rehabilitating and upgrading the three refineries.

“In the downstream sector, about $3 to $3.9 billion would go to revamping of liquefied petroleum gas, building of new Compressed Natural Gas (CNG) plants across the country and to pipeline and storage tank constructions.

“While $0.7 to $1 billion would be invested in ventures such as equipment leasing, development of multi-specialist hospital and cancer diagnostic and treatment centers.”

The minister told the investors that President Muhammadu Buhari, was bent on making sure Nigeria returns to economic productivity and transparent business transactions.

He stated: “Part of the progress made are the new policies and regulations like the new oil, gas, fiscal policies that are being developed and syndicated with all stakeholders and the Petroleum Industry Governance Bill to be passed by National Assembly by end of the second quarter.

“Business environment and investment drive, gas revolution including the gas flare commercialisation programme where investors are invited to submit detailed project proposals by end May.

“Private sector-led revamp for refineries being pursued and framework for new greenfield refineries including modular refineries in place; Niger Delta security and transparency and efficiency, among others.”