Modular refineries can end Nigeria’s crude processing woes – Oyarekhua

Nigeria needs modular refineries to eliminate shipping and handling charges for refined crude from Europe thus helping to reduce the pump price of the product says Momoh Oyarekhua, chairman of the Crude Oil Refineries Association of Nigeria (CORAN).

Oyarekhua said the challenges that emanated from subsidy removal and incremental value of petrol can be eliminated by enabling modular refineries.

“It will eliminate all middle costs, it will provide a lot of employment, and it will eliminate petroleum product -theft and pipeline breakage challenges. Nigeria could benefit from the modular refinery by eliminating those costs and making the products affordable,” he said in a televised interview recently.

Modular refineries require significantly less capital investment than traditional full-scale refinery facilities. The initial processing allows for simple distillation of crude oil into low-octane naphtha, diesel, kerosene, and residual fuel oil. They often process below 30,000 barrels per day (bpd).

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On the challenges facing modular refineries in the country, Oyarekhua said there is a shortage of crude supply and funding.

“Before now the law that establish the modular refinery as stipulated in the Department of Petroleum Resources of Nigeria (DPR) now Nigerian Upstream Petroleum Regulatory Commission (NUPRC) laws, states that the government would supply 60 percent of the crude required to run a modular refinery in the country but after establishing your company you still need to push for it to ensure the supply comes.

“Also, in the PIA, there is a domestic obligation for crude supply but all of these have not been activated because we keep engaging the bodies in charge but nothing is been done. Which poses a big challenge for us.”

When asked about facing competition from Dangote Refinery, he said that the modular refinery market is different from the conventional one and that there is a niche market for the former.