By Oscarline Onwuemenyi
ABUJA â€“ In a bid to expand production capacities and reduce the nationâ€™s dependence on imported oil and gas products, the Nigerian National Petroleum Corporation (NNPC) on Thursday signed an agreement for the joint sourcing of funds for the construction of three Greenfield refineries and a petrochemical plant estimated to cost $28.5bn by the China State Construction Engineering Corporation (CSCEC) Limited.
According to the Group Managing Director of NNPC, Mallam Shehu Ladan, the three Greenfield refineries are to be located in Lekki in Lagos State, Brass in Bayelsa State and Lokoja in Kogi State, while the citing of the petrochemical plant is yet to be decided on.
He said on completion, the three Greenfield refineries will add about 750,000 barrels per day capacity to Nigeriaâ€™s refining infrastructure and position NNPC to engage profitably in the international trading of refined petroleum products.
Ladan said the corporationâ€™s aim is to accelerate the construction of new refineries in the country to stem the flood of imported refined products which according to him, is currently estimated at $10bn annually.
Under the memorandum of understanding, the Chinese company is expected to source 80% of the funding in form of contractor financing and supplier credits from the China Export and Credit Insurance Corporation (SINOSURE) and a consortium of Chinese banks, while NNPC would provide 20%.
Ladan said the operational mode of the new refineries will be different from that of the existing ones, adding that government will have no shares or financial contribution to make in the construction and management of the plants as the entire project will be executed with loans sourced by NNPC and the Chinese firm.
The refineries are to be managed by CSCEC consortium upon completion until the full recovery of their loan used on the project.
In addition, he said the proposed petrochemical plant will source natural gas from what will be generated under the Nigerian Gas Master plan to produce polymers, solvents and particularly, gas based fertilizers that are required to boostÂ Nigeriaâ€™s agricultural production.
The NNPC GMD further noted that the new refineries with a combined capacity of 750,000 bpd will go along way in helping to eliminate theÂ reliance on imported petroleum product.
He said on completion of the hydrocarbon processing plants, Nigeria will save in excess of $10bn annually from the elimination of imported refined petroleum products and an estimated $1bn from the importation of fertilizers and chemicals.
â€œThese new plants are capable of generating direct and indirect employment for an estimated 20,000 Nigerians covering the periods of construction and operationsâ€
â€œOver the next decade, NNPC desires to eliminate completely, the current flood of imported petroleum products into Nigeria doe domestic consumption.Â In order to achieve this, an estimated 750,000bpd of additional refining capacity shall be required at home as well as international joint ventures with other refineriesÂ abroadâ€, he said.
Ladan said the execution of the refineries/petrochemical projects is to run for five year period, with construction of the refinery in Lekki commencing this year.
Speaking further on the importance of the project deal, the NNPC boss said the planned building of the new refineries will gladden the hearts of members of the labour movements who have been clamouring for the building of additional refinery in the country as a condition for supporting federal governmentâ€™s deregulation policy in the downstream sector.
The Vice President of CSCEC, Mr. Yu Zhende who signed unbehalf of the company, pledged that the firm will do everything possible to fast-track the execution of the projects and would abide by the provisions of the local content Act in the construction of the plants.
The Chief Executive Officer of Lenoil Group, the local content partner of the Chinese conglomerate, Mr. Leno Adesanya said the company was part initial effort to bring in the Chinese firm to partner with NNPC in the execution of the refinery project.
He said Lenoil is leading other local consortium of companies which are being positioned to take part in the provision of engineering and procurement services needed for projects in conformity to the local content demands.