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Shipment of crude to refineries:ISAN set to exploit opportunity

YEARS after complaining of domination of the coastal trade by foreign shipowners, a window for active participation in the oil and gas sector of the nation’s economy seems to have opened for Indigenous Shipowners Association of Nigeria (ISAN) with the proposal by the management of the Nigerian National Petroleum Corporation (NNPC) to lift crude by sea to the nation’s refineries.

pipeline

The NNPC proposal has sparked off series of activities in ISAN in preparation for the huge opportunity it would open for local shipping in the country.

Reacting to the proposal, Vice-Chairman of ISAN and Managing Director of Genesis Worldwide Shipping, Captain Emmanuel Ihenacho, told Sweet crude that local shipowners are ready to take advantage of the opportunity that would be opened by that proposal, if it actually becomes a reality.

Ihenacho noted that the first thing to do is to ascertain the quantity of the product that NNPC wants at the refinery on a daily basis, how long it would take the ship to get there, to tie up and discharge.

He also said the first thing the NNPC had to do is to tell operators exactly what their intention is and how they intend to achieve it, as professionals; they would then tell NNPC whether their plan is achievable or whether there is an alternative way of doing the same job.
These, he pointed out, are necessary for proper planning and execution of the project to make it a success.

He, however, warned that the shallow nature of the channel of about 6.4 meters around Escravos makes it imperative for vessels of that draft to go pass that point.

In his words, “If they have shipping people who understand the business and define what they want to do, I can look at them and say this is what you want to do but that is not the best. I can do it like this and it would be cheaper. So it is important that you have someone who has the logistic of movement around the area you want to go.”

“If you want to go to Warri for instance, one of the first things you have to understand is that when you cross the Escravos bar, there is a bar; a physical bar, at 6.4 meters and if you take a ship that if bigger than that, then the ship would not berth. But you want to maximise the amount of cargo that goes to the Warri refinery, so you are going to have to look for a shallow drafted vessel that can maximise risk at that shallow draft of 6.4.

“So the other thing that you want to know is how many tons they require on a daily basis, then you really want to know if there is a need to create receptacles. Then you can create a model on a piece of paper to say, if I have this ship here; this one is loading, look at the distance, how many hours it takes to get here, takes so many hours to tie up, it takes so many hours to finish, this one is going, this one coming, then we get a proposal with regards to the number of vessels and the kind of vessels and then we give them the cost.”
On whether Nigerian Shipowners have the capacity to lift the products, the Genesis boss said:

“When you asked me whether Nigerians have the wherewithal, I will say there are lots of  Nigerians who have it but the maritime press must continue to back indigenous operators to have these opportunities because we are talking about lifting crude to America but if we have the opportunity for lifting crude from our own Escravos into our own Warri, then that is an opportunity in terms of further building local capacity and training for the nation’s seafarers craving for sea time (practical training on board vessel).

In his own reaction, Secretary of ISAN, Captain Labinjo, put the total capacity of its members at 500,000 and stressed that they are not only ready for the lifting of crude to the refineries but that they have the kind of vessels needed to do the job.

According to Labinjo, “The gross tonnage of ISAN is over 500,000 tons and we are ready to do the crude lifting to the refineries.”
Similarly, Senator (Captain) Cosmos Niagwan, a maritime expert, in an interview with Sweet crude, noted that there is need for adequate preparation before the commencement of the exercise. Niagwan explained that for a start, government should engage the services of tank farms in both Warri and Port Harcourt for the storage of the product as a means of preventing disruption of production.

He pointed out that with combined production capacity of 210,000 barrels of crude per day for both refineries in Port Harcourt and 150,000 barrels in Warri, it would not be possible to meet the production quantity should government rely on tanker vessels to lift the products directly to the refineries.

However, there are fears expressed in some quarters that the new directive when executed, would lead to higher production cost of petroleum, thereby defeating the purpose for the introduction in the first place.

Others are of the opinion that the introduction would be a launching pad for the development of the local shipping industry and would eventually culminate in the movement into international shipping.


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