The federal government’s revenue is about to receive a major boost as Nigeria’s first offshore subsea bi-directional petroleum products intake and offtake terminal built by Pinnacle Oil and Gas Limited is set to significantly help in eliminating the N5 billion daily loss in revenues due to the gridlock in Apapa Port.
THISDAY understands that eliminating the N5 billion daily revenue loss would result from tackling the sub-optmisation and inefficiencies in the downstream sector, which had led to the multiple handlings in receiving products from mother vessels using daughter vessels with attendant cost implications.
The bi-directional offshore mooring facility which is made up of the Single-point Mooring (SPM) and the Conventional Buoy Mooring (CBM) facilities, with the capability to receive petroleum products from large vessels would be accompanied with the largest storage capacity of about one billion litres of product.
The ultra-modern purpose-built products intake, storage and offtake facility was conceptualised by Pinnacle to revolutionise the Nigerian downstream oil and gas industry by enabling the direct delivery of petroleum products from large vessels which would otherwise have been unable to berth anywhere on the Nigerian coastline.
However, owing to the socio-economic significance of the massive disruptive facility to the status quo in downstream sector, with its capability to revolutionalise the downstream oil and gas sector, President Muhammadu Buhari is being expected in Lagos this Saturday, to inaugurate the all-important infrastructure located at the Lekki Free Trade Zone.
Buhari has been championing efforts to increase investments in the nation’s oil and gas industry through positive policies aimed at enhancing ease of doing business and surely would be delighted to unveil the Pinnacle Oil’s terminal to the industry.
The Group Chief Executive Officer of Pinnacle Oil and Gas, Dr. Peter Mbah, who disclosed the president’s expected arrival for the inauguration of the facility during a parley with journalists in Lagos, espoused on the importance of the facility to the nation.
He said with the infrastructure the company has put in place, it had been able to address the delays in evacuating products in mother vessels that come to Nigeria.
Mbah also explained that the extra costs companies pay and the reduction in revenues that should be made through Custom Duties and Excise Duties as well as revenues to the Nigerian Ports Authority (NPA) have also been addressed.
He noted that one of the major benefits of the facility was to help to decongest the Apapa and the roads by reducing the time in evacuating products in mother vessels and increasing turnaround time, thus significantly eliminating demurrage and waste due to inefficiencies in the value chain.
“I read one time in your reports that the country was losing about N5 billion daily because of that gridlock in Apapa. That’s because we are unable to evacuate dry cargoes that are in the port.
“The implication of that is, if you cannot move the dry cargoes, you cannot bring in new vessels. So the earnings that government was supposed to be making from Customs duty and excise duty and the NPA fees and all that stalled.
“And then, the fees to pay for Nigeria-bound vessels went up almost 10 times because those vessels will reckon with the fact that when they get to our waters, they will have to wait for several days before they are allowed in. And they will pass that cost to Nigerians,” Mbah said.
According to him, with the reduction of the gridlock in Apapa, when the company’s facilities begin operations, there would be free movement of dry cargoes.
“Those vessels that would ordinarily wait for days if not months before they come into our port will be reduced, the number of waiting period will be reduced. It will impact on the freight costs.
“Also, the revenue of the government both the Customs and NPA will also be enhanced because you know the fast movement of those cargoes. So that’s how it impacts the economy,” he maintained.