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US, FG Back 20,000bpd Oil Refinery in Lagos

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  • US, FG Back 20,000bpd Oil Refinery in Lagos

The construction of a 20,000-barrels-per-day crude oil refinery in Lagos by a Nigerian petrochemical and refining company has received a major boost with the signing of a grant by the United States Trade and Development Agency.

Similarly, the Federal Government has pledged to provide the necessary support to the company towards the completion of the project aimed at ramping up the nation’s oil refining capacity.

The USTDA on Friday signed the grant with Eko Petrochem and Refining Company Limited for a feasibility study supporting technologies and development of an implementation plan for the modular refinery on Tomaro Island in Lagos.

Eko Petrochem and Refining Company said it had selected Texas-based VFuels, LLC to carry out the study, which would provide technical analyses and engineering and design needed to advance the refinery.

“We are proud to support this new project, which will lead to infrastructure development and economic growth in Nigeria. This project represents an excellent opportunity for the US businesses to export technologies and services in support of Nigeria’s refining goals,” the USTDA’s Acting Director, Mr. Thomas Hardy, said at the signing ceremony in Lagos.

The Chairman, Eko Petrochem and Refining Company, Mr. Emmanuel Iheanacho, said the US government, acting through the USTDA, had accelerated the process of the company’s planned economic investment through the industrial development grant of $797,343.

“We appreciate the USTDA supporting our company’s infrastructure development plans. The funds received will help ensure the timely completion of the proposed development and the attainment of the underlying economic and social impact envisaged,” he said.

Iheanacho said several studies, including the front-end engineering design as well as the environmental impact assessment, had been completed, adding that about $250m would be required to complete the refinery.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who commended the commitment of Iheanacho to the refinery project, said financing was one of the major challenges facing most of those that had been licensed to build refineries in the country.

He said, “We all know it is very difficult to raise funds and, therefore, when you hear that the USTDA is extending its hands of fellowship and support to provide the initial seed funding required to go beyond the detailed engineering design, that also shows that behind him (the visionary of this project) there is a partner that is likely to support and provide the financing required to establish the refinery.

“For him to be able to bring down to this island the US ambassador is another demonstration of the commitment and determination to do whatever is necessary to see this project come on stream.

Kachikwu, who was represented by the Executive Director/Coordinator, Nigeria National Petroleum Corporation, Refinery, Downstream and Infrastructural Development, Mr. Rabiu Suleiman, promised to provide all the necessary support required by the company to make the refinery a reality.

He said he was working hard to see how the company could be granted a pioneer status and secure various duty waivers, import facilitation of equipment and engineering review.

The minister urged the company to take the host communities along in order to create a harmonious relationship with them.

The US Ambassador to Nigeria, Mr. Stuart Symington, while commending Iheanacho for the commitment to the project, said, “He is investing at a time with the government that believes profoundly in the power of the individual citizens and entrepreneurs, and he is doing it at a time with a government that believes Nigeria can do what can be done anywhere in the world.”

The Managing Director, VFuels, Mr. Souheil Abboud, said the company was proud to partner the USTDA to further develop the refinery, adding, “We believe very strongly in our commitment to serving the Nigerian people and are enthusiastic that the USTDA shares the same vision and commitment.”

He said the refinery would be a model for those looking to improve Nigeria’s local refining capacity and would contribute to the growing demand for fuels and electricity.

The USTDA helps companies to create the US jobs through the export of the US goods and services for priority development projects in emerging economies.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Stop Maize, Soybean Export to Reduce Scarcity – NIAL

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Stop Maize, Soybean Export to Reduce Scarcity – NIAL

The Nigerian Institute of Animal Science on Tuesday called on the Federal Government to halt the continued export of maize and soybean to reduce the scarcity of the commodities as well curb their price hike in Nigeria.

Registrar and Chief Executive Officer, NIAL, Prof. Eustance Iyayi, told journalists in Abuja that the poultry sector was currently hit by the severe scarcity of maize and soybean.

This, he said, was due to the continued export of the commodities, the COVID-19 pandemic, which had disorganised the international supply chain, lingering insecurity in the North-East, farmers/herders conflict and flooding in some parts of the country.

“Maize and soybean are being exported and this has exacerbated the situation leading to local scarcity and price escalation of the commodities in poultry production,” Iyayi stated.

He added, “The increasing prices of the essential commodities has resulted in the increase in price of finished feeds by about 75 per cent.

“This has led to the closure of small and medium sized poultry farms thereby threatening about 10 million jobs as a result of this scarcity.

“To set the poultry industry from total collapse, the institute urges the government to immediately halt the exportation of soybean and maize and grant import permit to importers at the official foreign exchange rate.”

Iyayi said there was shortage of soybean in Nigeria and other countries, stressing that the little amount being produced across the country should not be exported.

He said the current maize yield of about one to two tonnes per hectare being produced in Nigeria would not be enough to sustain the country.

The NIAL helmsman stated that the country should be producing between seven and 10 tonnes per hectare in order to meet the requirements for humans and animals.

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Economy

Petrol Landing Cost Jumps to N186, Oil Hits $64

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Petrol Landing Cost Jumps to N186, Oil Hits $64

Against the backdrop of the rising price of oil prices, the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.

Investors King had exclusively reported on February 9 that the landing cost of PMS rose to about N180 per litre on February 5 from N158.53 per litre on January 7.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N186.33 per litre on February 16, with the pump price of the product expected to be N209.33 per litre.

The international oil benchmark, Brent crude, closed at $63.96 per barrel on February 16, up from $59.34 per barrel on February 5.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.

Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).

The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.

The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).

Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.

The cost of petrol would be higher if the 410/$1 rate at which the naira closed on Monday at the Investors’ and Exporters’ Foreign Exchange Window was used. The naira closed at 480/$1 at the parallel market.

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

Oil marketers said recently that they were ready to resume importation of petrol if the foreign exchange was made available to them at a competitive rate.

“The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens,” the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said at a virtual press briefing.

Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.

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Economy

FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

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FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

The Federal Government has said about 100 million Nigerians will be lifted out of poverty through the National Gas Expansion Programme (NGEP).

The Minister of State for Petroleum Resources, Chief Timipre Sylva, disclosed this on Monday during the inauguration of the NGEP in Ado Ekiti, Southwest.

Sylva said the project was “a practical demonstration of President Muhammadu Buhari’s commitment to lift 100 million Nigerians out of poverty by using gas value chain as catalyst for social and economic development in Nigeria”.

The minister said, “The programme has its main objective to reinforce and expand gas supply as well as stimulate demand in Nigeria through effective and efficient mobilisation and utilisation of all available assets, resources and infrastructure in the country.

“The programme is geared towards the implementation of Mr President June 12, 2019 promise to take hundred million Nigerians out of poverty within the current decade by ensuring that locally produced, available, accessible and affordable fuel is sufficiently supplied across the country”.

Sylva added that Nigeria was richly endowed with mineral resources, specifically, hydrocarbons, crude oil and natural gas with proven gas reserves of over 200 trillion cubic feet of natural gas, which he said had presented the country with opportunity to use gas as a catalyst for social economy renaissance.

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