BusinessDay
NigeriaDecides2023

Pinnacle’s $1bn Offshore Subsea Petroleum Terminal To Ease Apapa gridlock

The operation of Nigeria’s first offshore subsea bi-directional petroleum products intake and offtake terminal built by Pinnacle Oil and Gas Limited will provide downstream operators with an alternative to Apapa helping to ease the perennial gridlock and saving cost for maritime operators, the company has said.

Pinnacle Oil and Gas Ltd completed a first-of-its-kind petroleum products terminal off the coast of Lagos that allows for the intake and offtake of refined petroleum products from mother vessels through an undersea pipeline to its terminal in Lekki.

The facility which was conceived in 2011 gulped over $1 billion worth of investments from a consortium of local and international lenders and required multiple approvals up to the Federal Executive Council and earned the company a local content award for the liberal use of local skill.

Operators say it will help in eliminating e daily revenue loss from sub-optimal port operations leading to long queues. It is helping to reduce heavy cost involved in the operation of mother and daughter vessels.

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 is supported by 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.

Peter Mbah, Group Chief Executive Officer of Pinnacle Oil and Gas, in a media briefing, 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.

Read also: In sign of competition ahead, Mozambique sends first LNG cargo to Europe

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.

The facility is a game changer as it eliminates the need for expensive vessel lightering, reduces the incidence of demurrage for visiting mother vessels, cuts losses that typically occur during lightering operations, and leads to significant savings for vessels berthing at the Terminal as opposed to berthing at any of the other mooring facilities in the Lagos area.

The current system sees large vessels unable to get to the ports because of the draft restrictions, as the water channel is not deep enough for them to offload their cargo into storage terminals. So the mother vessel sits at the anchorage, and smaller vessels, called daughter vessels, come in to evacuate the products for onward delivery to the storage terminals.

Mbah said the process was inefficient and costly. It would take a small vessel with a 20m litres capacity would do four voyages to evacuate a mother vessel bearing 80m litres of petrol. Each voyage takes 8 days to complete and would require 32 days in total.

“With Pinnacle’s solution, the entire process takes a mere 24 hours, the extra day is to complete regulatory formalities.

“What we did in Pinnacle was to observe these multiple handlings in the operating space and design facilities that disrupt those suboptimisation and inefficiencies,” he said.

Pinnacle’s solution is to build a Conventional Buoy Mooring (CBM) Facility, essentially an offshore Mooring System with two 16inch, 8km subsea products pipeline network. The system has a combined discharge flow rate of 1800m3/hr. The company also built a Single Point Mooring (SPM) facility with two 24inch,10km subsea products pipeline network with combined discharge flow rate of 4,000m3/hr.

The CBM which includes 4 individual buoys as well as a power buoy is located in 16m water depth, and is connected to the shore storage with 2 x 16in lines, with a discharge capacity of up to 1,800 cubic metres per hour(1800m3/hr).

Get real time updates directly on you device, subscribe now.