By dint of ambidexterity and audacious determination to change the status quo, Pinnacle Oil and Gas has ushered in a regime of efficiency, cost optimisation and robust competition in the Nigerian downstream petroleum sector with its $1 billion ultramodern offshore subsea mooring petroleum terminal in Lagos, writes Peter Uzoho
It is now a month gone since the presidential unveiling of Nigeria’s largest and first ever offshore subsea bidirectional intake and offtake petroleum terminal built by Pinnacle Oil and Gas Limited at the Lekki Free Zone.
However, the accolades and testimonials trailing the coming on stream of the all-important facility from industry players and policymakers within and outside the country are yet to subside.
The facility constructed at an estimated cost of more than $1 billion has positioned the company as the leader in the industry both in terms of market share and volume of product supply.
The company now comfortably controls about 23 per cent share of the downstream market in Nigeria. This, indeed, is an outcome of a visionary and forward-looking leadership in the company, which is poised to de-risk the operations in the sector it plays and maintain its dominance.
The terminal, which comprises the Single Point Mooring facility (SPM) and the Conventional Buoy Mooring facility (CBM) with the capacity to receive large import and export vessels, has addressed some major challenges facing the downstream sector. Specifically, the facility has reduced, if not eliminated, the inefficiencies and resultant high cost of operation occasioned by multiple handlings hitherto obtained at the nation’s port.
The efficiency and cost optimisation now brought into the petroleum products import and distribution system by the company through the revolutionary mooring facilities, signaling the berthing of bigger vessels directly at the Nigeria ports, and ending the use of daughter vessels to discharge, has eased the traffic congestion in Apapa.
With the berthing of bigger vessels at the Nigerian port where products are now discharged directly to storage tanks, the era of vessel taking about one month to completely empty its content has gone, as the discharge period has been reduced to just 48 hours.
In addition to the mooring facilities, the terminal has in it, storage tanks of 300 million litres combined capacity, and Pinnacle plans to ramp it up to one billion litres when the next phase of the project is completed.
While inaugurating the facility on October 22, 2022, President Muhammadu Buhari had disclosed that the operations of the facility had eased congestion in the Apapa area, and reduced the cost of delivery of petroleum products to many parts of the country.
The elated president, who has been championing reforms in the nation’s oil and gas industry, congratulated the Chief Executive Officer of Pinnacle Oil and Gas Limited, Mr. Peter Mbah, for establishing the massive terminal facility and providing hundreds of jobs to Nigerians.
Buhari specifically described the investment made by the dominant industry player as a demonstration of the success of his administration’s agenda to transform the nation’s economy.
Buhari, who said the federal government looked forward to many more investments of the Pinnacle’s magnitude, however, reiterated his government’s continued commitment to encourage and support investors to take advantage of the ongoing reforms in the oil and gas sector as enshrined in the Petroleum Industry Act (PIA) and replicate the feats achieved by Pinnacle Oil and Gas Limited.
Buhari said: “Provision of energy security is one of the cardinal points of our administration. We have recognised that the seamless supply and distribution of petroleum products is challenged by infrastructure deficit and complicated by the congestion in the Apapa areas of Lagos since the start of our administration in the year 2015.
”We provided targeted support to the energy industry by providing an enabling environment, including regulatory facilitation, to ensure investment in critical infrastructure.
“I am happy today that Pinnacle Oil and Gas Limited leveraged the opportunities and established this massive terminal facility. I am happy to also note that further expansion works which are starting will further provide incremental value, especially more employment to our teeming youth population.
“The success of our agenda to transform our country is demonstrated by this massive investment and the obvious contributions it has made to our overall economic well-being.”
FACILITY, ANOTHER LANDMARK PRIVATE SECTOR INVESTMENT IN LAGOS
Not holding back his joy and excitement for seeing the facility come on stream during his tenure, Lagos State Governor, Mr. Babajide Sanwo-Olu, said the Pinnacle terminal in the Lekki Free Trade Zone was another landmark private sector investment in Lagos, the state of aquatic splendour in the commercial and economic nerve center of the country.
According to him, our message has always been that Lagos is open to business and investment and this is yet another demonstration of that.
As the nation’s largest sub-national economy, the governor said they understand what their responsibilities were, which includes to lead by example, to create that enabling environment most conducive for investment across all sectors.
“I’ve had the privilege to be here a couple of times, Peter Mbah and I had walked through this facility before, and I can say to you that indeed, it’s beholding and it’s a manifestation of the very strong can-do spirit that we have in our country in Nigeria.
“I think Peter deserves another round of applause. Free Trade Zone which is the Lekki Free Zone is the most active and vibrant free zone we have in the country, and it comes with a lot of history. It comes with a lot of vision that has been put together by one of my predecessors, Bola Ahmed Tinubu, way back in 2006.
“We can begin to see that the implementation of such vision, with successive governments also pushing in and raising the bar, is why we’re here today seated comfortably and to commission this edifice,” Sanwo-Olu said.
He said he had been told that the petroleum products terminal has been designed to make possible the direct transfer of products from large vessel to the CBM and SPM facilities.
“What this means is that vessels that wouldn’t come around here, 90,000 deadweight (DWT) tons, and 150000 DWT can conveniently berth here and discharge their products effectively within the minimum turnaround.
“There is no need for smaller ships to be deployed to transfer products to and from larger vessels which was often very necessitated at many other parting locations, which I’m told can take as long as 30 to 45 days.
“On the other hand, the direct transfer that is possible here can be done within a maximum of two days,” he added.
In addition, the Lagos Governor noted that the facility could store up to 300 million litres of refined petroleum products, maintaining that by all standards.
“This is an impressive, audacious facility built to the highest standards available anywhere in the world,” Sanwo-Olu added.
According to him, what was even more interesting was that the inaugurated facility was only the first phase of a larger plan that would have a capacity to store as much as a billion litres of petroleum products.
Observing that the Pinnacle facility would not only serve Nigeria, Sanwo-Olu added that it has also been positioned to look at the opportunity of export on the West African corridor, covering that single market, which Lagos would continue to remain the commercial and logistics hub of the entire West African region.
TERMINAL NOW THE LARGEST EXIT POINT
For the Nigerian National Petroleum Company Limited (NNPC), the Pinnacle Oil’s facility would be handy to it as the state oil company grapples with delivering on its mandate of guaranteeing energy security for the nation.
The Group Chief Executive Officer of NNPCL, Mallam Mele Kyari, described the facility as the largest exit point for petroleum products currently in Nigeria, adding that Pinnacle’s facility has demonstrated capacity by easing the delivery of petroleum products in many parts of the country and during difficult situations.
Kyari said, “We have transformed, we are a commercial company, we have partners, and one of the great partners that we have is Pinnacle Oil and Gas. Without mincing words, this is the largest exit point for petroleum product that we have today.
“We will always remember that the exit point that will work for us in recent times is the Pinnacle facility. I congratulate you Peter for great work done, and for us at NNPCL, we will continue to partner with you and other stakeholders, other investors in this space as we continue to provide energy security for our country, which is very critical for all of us.
“All this wouldn’t have happened except there is an enabling environment. That enabling environment was surely created by Mr. President in the last seven years by allowing regulation to work, by allowing investors to have access to financing, supporting them in every way, and also bringing a framework which culminated in the Petroleum Industry Act (PIA) coming in place to make sure that business works in the energy sector.”
He noted that NNPC sees a great opportunity unfolding, particularly for Lagos with growth in population and as well as the substantial growth in energy requirements despite the conversations around energy transition.
According to him, the massive growth in today’s Nigerian economy requires energy, adding that facilities like the Pinnacle terminal would become very primary in the journey towards energy sufficiency and security.
Kyari noted that the largest concentration of downstream facilities was in Lagos and that they rely on Lagos to have energy security in the coming years while they continue to diversify in the best interests of Lagos because of the associated challenges, which the Pinnacle facility has helped to resolve.
MAJOR BREAKTHROUGH IN INSTILLING EFFICIENCY IN DOWNSTREAM
Delighted by such disruptive innovation in the sector, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed, described the terminal as a major breakthrough in instilling efficiency in the downstream sector.
He said the facility would significantly transform Nigeria’s downstream sector having addressed the challenges hitherto experienced with multiple handlings associated with discharging products from mother vessels through Daughter vessels with attendant delays, high costs and gridlock in Apapa.
Assuring Pinnacle of the agency’s collaboration and support for investing in the sector, Ahmed enjoined the company and other investors to always come to the Authority for support and assistance.
“I’m indeed delighted to be here to witness the commissioning of this huge facility. It is indeed a breakthrough in instilling efficiency in the downstream sector of the Nigerian oil and gas. We are delighted to be here.
“We assure you that NMDPRA will collaborate with you and all those who are interested in investing in the mid and downstream sector of the Nigerian oil and gas. We will support you and we will be collaborating with you.
“And if there’s any area that you need support, please, by all means, do not hesitate to come forward. I also wish to acknowledge the contribution of Lagos State towards this project, as well as others that will eventually make this area the hub for Nigeria oil and gas,” he said.
Noting that the inauguration of the facility was an exciting moment for the agency, Ahmed pointed out that Lagos Free Zone would be a major hub for not only West Africa but Africa as a whole and that Nigeria would benefit greatly from the economic benefits of these investments.
FACILITY TURNING LAGOS INTO WORLD-CLASS MEGA CITY
Also baring his minds on the transformational terminal, the Chairman of the Lekki Free Zone Development Company, Mr. Abiodun Dabiri, said the successful actualisation of the construction of the ultramodern terminal would go a long way in transforming Lagos into a world-class mega city.
As part of this modern industrial hub evolving in Lekki Peninsula, he added that Pinnacle’s successful completion of the terminal facility was particularly satisfying on account of the levels of perseverance required to bring it to fruition.