Modular refiners to get pioneer status, duty waivers
• USTDA to fund Eko Petrochem & Refinery
The Federal Government has unveiled plans to assist investors in modular refineries to obtain pioneer status, secure various duty waivers, import facilitation of equipment and engineering review to enable Nigeria become self-sufficient in petroleum refining.
This comes as the U.S. Trade and Development Agency (USTDA) approved a grant of $797,343 (N243 million) for Eko Petrochem and Refining Company Limited, to assist in the construction of a 20,000 barrel per day (bpd) modular refinery in Lagos.
The grant is to finance the feasibility study supporting technologies and development of an implementation plan for the modular refinery located on Tomaro Island in Lagos.
Speaking at the signing ceremony in Lagos, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, reiterated government’s commitment to the establishment of modular refineries in the country.
He said financing was one of the major challenges facing most of those that had been licensed to build refineries in Nigeria.
Kachikwu stated: “We all know it is very difficult to raise funds, and you then 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. This 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 the company to be able to bring down to this island the U.S. 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, 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 USTDA’s Acting Director, Thomas Hardy, at the signing ceremony in Lagos, said: “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 U.S. businesses to export technologies and services in support of Nigeria’s refining goals.”
The Chairman, Eko Petrochem and Refining Company, Emmanuel Iheanacho, said the U.S. 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 $250million would be required to complete the refinery.
The US Ambassador to Nigeria, Stuart Symington, while commending Iheanacho for the commitment to the project, said: “He is investing at a time that the government believes profoundly in the power of the individual citizens and entrepreneurs. And he is doing it at a time that government believes Nigerians can do what can be done anywhere in the world.”
The Managing Director, VFuels, 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.