$8bn Refinery Floated in Lagos, To Produce 300k Barrels Per Day
LAGOS, July 05, (THEWILL) - Lagos State Government, Nigerian National Petroleum Corporation (NNPC) and a consortium of Chinese investors under the aegis of China State Construction Engineering Corporation Limited today finally sealed a deal to establish a refinery capable of producing about 300,000 barrels of crude oil per day.
The deal, which commenced precisely two years ago, was fine-tuned andã€€sealed today duringã€€the joint visit of the NNPC and China State Construction Engineering Corporation Limited executives to Governor Babatunde Raji Fashola (SAN) at the Governor’s Office in Alausa, Ikeja.
THIEWILL gathered that the refinery would cost a sum of $8 billion, which will be co-funded by the Lagos State Government, NNPC and China State Construction Engineering Corporation under an arrangement of public private partnership (PPP). The refinery will be sited within the Lekki Free Trade Zone (LFTZ).
At the meeting, it was revealed that the consortium of Chinese investors "will take up 80 percent of the funding leaving the remaining 20 percent to the NNPC. Lagos State will provide such necessary infrastructure as road network, electricity in addition to land."
But speaking at the forum, NNPC Group Executive Director (Engineering & Technology), Mr. Billy Agha said the deal which started two years ago aimed at partnering with the state government in establishing the Lekki Greenfield Refinery and Hydrocarbon Industrial Park Project.
Agha pointed out that NNPC and the consortium "executed a memorandum of understanding (MoU) to jointly seek for debt financing for the funding and construction of three Greenfield Refineries and one petrochemical plant in Nigeria to the mutual benefit of both parties.
"China State, the sixth largest engineering firm in the world, has pledged not to only assist in procuring funding on competitive terms, but also ensure that bona fide Chinese investors take up at least, 25 percent of the equity holding in the project," he said. ã€€
Agha explained that the refinery "is expected to produce about 500,000 metric tons of liquefied petroleum gas (LPG) per annum. The availability of such a volume of LPG is expected to trigger the formal switch of domestic household fuel in Lagos from firewood, charcoal and kerosene to the liquefied petroleum gas.
"The project will offer job opportunities for up to 5,000 construction workers, and an estimated 2,000 workers to run the industrial complex. Other multiplier effects will include the generation of local businesses for auxiliary services including the suppliers of goods and services of all types to the hydrocarbon complex.
During the visit, the governor said the state government "is set for the multi-billion naira project as he praised the PPP initiative as tool for developmental projects in modern world, saying the project was coming at the most opportune time and in line with the objectives of the establishment of the LETZ by the state.
Fashola explained that government did not foresee any hurdle in the project with the involvement of the Chinese investors because the state was already partnering with another group of Chinese investors in the development of the first phase of the LFTZ.
According to him, this is coming at the most opportune time to utilize the capacity in private sector to turn things around. We have partnership with the Chinese at the Lekki Free Trade Zone already, so we should be speaking the same language.