‘How to address redundancy in Nigeria’s refinery operations’
Considering redundancy challenges, especially poor capacity utilisation affecting refineries in Nigeria despite the huge import of refined petroleum products, Managing Director, Waltersmith Petroman Oil Limited, Chikezie Nwosu has urged the country to leverage modular refineries to bridge the gap.
Stressing that the development would meet the needs of the people and the ability to build an economic model that works, Nwosu said given Nigeria’s challenges, focusing on modular refineries would allow the country to address the issue of redundancy.
“If there is a problem with one of them, you can still deliver petroleum products. The problem with building one hug refinery is that if something goes wrong and enough redundancy has not been built-in, then you cannot send out the refined products. This will impact your volume significantly. Going through a modular approach helps against that redundancy,” he said in an interview.
Speaking on energy transition, Nwosu noted that though oil majors are serious about energy transition, they still stake resources on gas because gas helps in decarbonizing fossil fuels.
Urging the country to leverage its resources as the world moves away from fossil fuels, he noted that gas is a cleaner fossil fuel and if replaced with fossil fuel, Nigeria would clean up the environment.
“After then, we can get into renewable sources of energy because gas doesn’t have an infinite lifetime. We are getting to a point when renewable becomes more important as technology will bring down the cost significantly and then we can go into that area. That does not mean that renewable will not happen in modular versions. It has to be a step at a time,” Nwosu noted.
According to him, though Africa is blessed with resources, especially the energy resources, there was a need to use the resources to the benefits of the region instead of exporting to another region.
Nwosu said Africa, especially Nigeria must look at domestic consumption, stressing that while the export market could pay off, there was a need for a paradigm shift in the country.
“We need to create domestic markets that can pay. We should leverage on that to expand to a domestic market that can’t pay. When you increase the economy of those that cannot pay, they will be able to pay.
With a new industrial park embarked upon by his organisation, Nwosu noted that opportunities would be created to boost capacity for companies.
“When industries come in there, especially manufacturers, agro-business and others, you are delivering power as cheap as possible to them. They will have other infrastructure, for instance, a road network. Power is a challenge, it will go a long way if they know that they come to an industrial park and get affordable power. So, part of the contract would be that they pay.”
“Instead of continuously arguing about the poorer consumers, who don’t have the ability to pay, why not shift the paradigm, deliver power to industrial giants, who will come into a place and have the ability to pay. The cost of increasing from 300 Megawatts to 350 MW is not the same as going from zero to 300MW. By the time you put in 300MW of power and you have customers that are paying, it is possible to do an expansion and deliver to customers that pay less. The hope is that the customers paying less
He noted that intervention of the Nigerian local content board on the Waltersmith refinery has fast-tracked the project, stressing that apart from being a partner they have helped in navigating through the regulations, providing an understanding of the local content issues.