Nigeria’s small scale crude oil refiners have been producing diesel, kerosene, jet fuel, high pour fuel oil, even naphtha, for, in some cases, over the last 12 years.
Now that a chunk of the government’s subsidy on Premium Motor Spirit has been removed, some of the companies are mulling ideas about secondary refining, which takes them to the point of producing Premium Motor Spirit (PMS), also known as gasoline.
But the readiness and/ or capacity to invest in the production of PMS depends on which refiner you are talking to.
“The catalytic reformer helps you to go into second secondary refining”, says Momoh Jimah Oyarekhua, CEO of OPAC Refinery, located in Delta State, but “part of the reason why most modular refineries today don’t have or cannot produce PMS is because they’ve not been able to purchase the units that will make them to go into secondary refining”.
Oyarekhua, who is the chairman of the Crude Oil Refinery-owners Association of Nigeria (CORAN), says that “the catalytic reformer, is a very expensive unit. Only three or four companies, globally, have the license to provide the equipment, so it’s not cheap”. He says that CORAN is advocating for some form of intervention fund from government so that refiners can invest in installing catalytic reforming units in their processing lines.
But Oyarekhua is not speaking for all modular refining companies when he says that government intervention fund is required to install a catalytic reformer.
Indeed, Aradel Holdings, operator of the Ogbele field and owner of a three train 11,000BPSD refinery, is in the process of completing the installation of one such reforming unit. “We are not into any partnerships and we have not received any government funding for that”, Gbite Falade, the company’s CEO, Africa Oil+Gas Report. “But it’s true, it is expensive. The cost of the reformer unit itself, was as much as, if not more than what it cost us to install the refinery trains 2 & 3 combined, which have a collective capacity of 10,000BPSD. So, it’s really expensive and it is the reason why most modular refineries would not contemplate doing it but for us, we have a long-term vision”.
Ultimately, Falade explains, “we would like to scale up to capacities that are much higher, for which the 11,000BPSD that we are grappling with right now will look like a proof of concept”. Falade says: “Today, we have a PMS station that is mechanically completed so what we’re getting into now is the commissioning in 2024”.