Lee Engineering and Construction Company Limited, an engineering, procurement, construction, operations and maintenance (EPCOM) firm will in the second quarter of 2022 commission its $100m fabrication yard under construction in Warri, Delta State, in what it describes as validation of Nigeria’s local content strategy.
The facility, which could guarantee the fabrication of any equipment required in the oil and gas industry locally and across Africa, is being constructed on a land covering about 10,000sqm where the company’ operations is based and is over 90 percent complete according to officials of the company.
Taking journalists and others on a tour of the facility, Leemon Ikpea, Chairman/CEO of the company said when commissioned, the facility will serve as a hub for local manufacturing of various equipment for use in the oil and gas sector.
“Presently, all manners of steel fabricating machines have been installed and Nigerians with the necessary expertise are operating them perfectly,” he said.
Ikpea said the idea for the facility dates back to the 1980s when he worked as a manager at Snamprojettif, a contracting firm servicing the Warri Refinery and Petrochemical Company Limited, (WRPC). He saw the potential of Nigerian skilled workers and decided to enhance it.
According to Ikpea, he noticed that many Nigerians were performing various tasks as electricians, welders and so on. The foreigners were mostly there as supervisors. Since there were many skilled Nigerian workers around, he sought to leverage on it.
This led to incorporating Lee Engineering and Construction Company in 1991. Thirty years later, the firm has established itself as a major player in the core concept of engineering, procurement, construction, operation and maintenance (EPCOM) and is venturing into industrial equipment fabrication.
Some International Oil Companies operating in Nigeria have had to rely on the company’s expertise. Lee Engineering & Construction Company Limited won the main contract that carried out the design, procurement and construction work required to upgrade Shell’s Utorogu plant.
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Lee Engineering & Construction Company Limited and similar indigenous firms, analysts say, validate the country’s local content policy that seeks to transfer technical skills to local players.
Experts say a large proportion of the heavy equipment used to connect the gas wells to the gas plants was built in Nigeria and much of the construction materials and supplies including power cables, cable trays and accessories, paint and civil infrastructure materials were locally manufactured.
Ikpea said the materials used for the job were fabricated in his factory in Warri. He stated that having executed such high profile jobs including the building of the Port Harcourt Refinery jetty, and currently involved in the fabrication of two modular refinery factories, his company is set to expand the frontier of industrial equipment fabrication in Nigeria and Africa in general.
The success of facilities like Lee Engineering’s fabrication yard can have a transformative impact on the country, turning it into a hub for local manufacturing
Fabrication hub
LEE Manufacturing & Fabrication Workshop is set to undertake both small and massive fabrications of new vessels and spools for process facilities especially within the Oil & Gas Sector.
The Fabrication workshop measures 2,515sqm, complete with blasting/painting bays and state-of-the-art equipment. It will also engage in the maintenance of existing equipment for clients for optimal performance.
The success of facilities like Lee Engineering’s fabrication yard can have a transformative impact on the country, turning it into a hub for local manufacturing. It could cut foreign exchange used currently in the importation and earn taxes for the government.
Prior to the pre-commissioning era, Lee Engineering entered into a critical partnership with foreign equipment manufacturing companies who supplied the machines to be used for fabrications. Its technicians have trained abroad.
Osere Damian, a Senior Supervisor who spoke with reporters said over 10 persons in his department have attended overseas training in the last ten years in preparation for the full take-off of the project.
According to the company, the plant will be fabricating and manufacturing high-pressure vessels, heat exchangers, water bath heaters, glycol, skids, scrubbers, process modules, storage tanks/Columns and flare systems.
Other items are: drums, piping spools, enclosures, gas cylinders, flanges, milling of oil and gas tools, oil, gas and general fabrications as well as carrying out maintenance on existing pressure/process vessels and their components.
Osere told reporters that when fully operational, the firm can fabricate all equipment required for establishing a refinery. He stated that currently, they are engaged in the construction of two modular refineries, one in Bayelsa state the other in Imo state. He stressed that the structure and materials for both projects were fabricated by Lee Engineering.
Adeniyi Adebayo, the minister of Industry, Trade and Investment, who visited the factory site last year, said the equipment that are made there are to facilitate the production of crude oil and gas as a lot of the equipment being used presently are being imported from abroad.
He said when the factory is completed, a lot of the things that are imported would be locally produced.
Relating it to government’s desire to reduce unemployment he said, “President Muhammadu Buhari had promised to get 100million Nigerians out of poverty over the next 10 years, one of the ways this could be achieved is by encouraging industrialists to create new industries and to expand the ones they have to enable them employ more people.
“By the time the factory is completed next year, the nature of its specialisation would create a situation where the country won’t have to import anymore and even people abroad can come and buy from here,” he said.
There is no better way to actualise such lofty objectives than ensuring the right policies that will encourage patronage of indigenous firms like Lee Engineering are speedily pursued and enacted, analysts say.
Local content success
The Nigerian Oil and Gas Industry Content Development (Local Content Act) 2010 was enacted to promote indigenous participation in Nigeria’s oil and gas industry for the purpose of improving the economic and social well being of those engaged in operating in the oil and gas industry.
The Act provides for the development of Nigerian content in the Nigerian oil and gas industry, Nigerian content plan, supervision, coordination, monitoring, and implementation of the Nigerian content.
“The Act has been fundamental to the promotion of the development of indigenous capacity in the Nigeria oil & gas sector,” states Olusola John Jegede, legal expert at Resolution Law Firm in a note.
On the 30th anniversary of the company in November, President Muhammadu Buhari who was represented by his Media Adviser Femi Adeshina praised the company for its commitment and resourcefulness to undertake key projects in the oil and gas industry that used to be the exclusive preserve of multinational companies.
According to Ikpea, Lee Engineering which currently employs over 2,000 Nigerians, wants to produce high quality, reliable and durable products, through competent workforce and technology, within regulatory laws.
“We intend to change the existing orientation of clients procuring similar components abroad with scarce hard currency and, in the process, boost the national economy and reduce procurement lead time.
“If you look around the oil and gas sector, most production is done outside the shores of this country and if we fold our hands and wait for the government, foreign firms and partners to transfer technology to this country, I don’t see that happening. Considering the market situation, if they transfer technology to you, the question to ask will be: who will be buying from them?” he said.
