DPR gives approval for new N26 billion refinery in Lagos

The Department of Petroleum Resources (DPR), has given Integrated Oil and Gas Ltd, an indigenous company, license to begin preliminary work for a 20,000 capacity modular refinery on the Lagos coast estimated to cost between $75 – $250 million dollars.

Emmanuel Iheanacho, chief executive officer of the company revealed this to journalists this week in Lagos and stated that the company upon receiving the preliminary approval from DPR has commenced work on the Environmental impact Assessment (EIA), one of the series of steps required to obtain full approval.

“If you go to the DPR website, you will see all the terms and conditions for granting of refinery licenses. The DPR gives you license in stages, it gives you license to establish, license to construct and after that it gives you license to operate.”

Iheanacho noted that his company is working on other necessary requirements needed before the final approval for the refinery can be granted.

“The DPR will give you license based on the technology that is used for refining and your ability to give then very good presentation on that subject matter”

Funding from the project, according to Iheanacho will be sourced from both local and foreign banks.

Remarking on the reason for the huge capital required, Iheanacho stated that if the refinery is constructed without the capacity to produce Petroleum Motor Spirit (PMS), Automated Gas Oil (AGO), the cost would be around $75 million, whereas if those components are included, the cost would be around $200 million.

DPR regulations require that a successful application must complete a cycle of three licensing stages before a plant can be commissioned for operation. The plant must obtain a license to establish, a license to operate the plant whether for petroleum refinery, petrochemicals and gas processing plant.

These licenses must be obtained within a period of two years after which the application will lapse.

Iheancho said his company has met with major stakeholders to ensure a success of the project including traditional rulers of the host communities.

He debunked what he called ‘insinuations’ that the construction of the refinery has started, reiterating that the company is only just now going through pre-application process.

In 2005, former president Olusegun Obasanjo had given license for the operation of 18 private refineries but they failed to achieve any real results for a number of reasons including funding challenges and government policy on petroleum subsidies.

The federal government in October 2015 concluded plans to issue 23 licenses to establish modular mini refineries to boost local refining capacity and reduce importation of petroleum products in the country.

Modular refineries are processing plants that have been constructed entirely on skid mounted structures and through interstitial piping the components link together to form an easily manageable process.

Their mini variant, thought to be a quick fix to perennial scarcity of petroleum products, are imported fully assembled and tested prior to overseas shipment. They are then installed at the client’s site reducing construction time.

However few beneficiaries of these licenses have put them to use. If this bid sees a successful outcome, Emmanuel Iheanacho will join Aliko Dangote and a growing list of indigenous participation in private refinery operations.

 

ISAAC ANYAOGU