Two more oil firms have proposed to the Lagos State government to establish refineries in the state. The firms are said to have already received the nod of the Department of Petroleum Resources (DPR), the industry regulator.
According to a DPR source, the two firms are proposing a 100,000 barrel per day refinery each, to be located at Ejinrin and Badagry , all within the state.
The companies include Mid Oil, which is interested in siting its refinery at Ejinrin, a suburb of Ikorodu, and South Atlantic Petrochemical Company, said to be looking in the direction of Badagry.
If the firms’ proposals scale through, Lagos could be leading other states in terms of the number of oil refineries established anywhere in the country, as the latest two will bring to three, the number of oil refineries so far expected in the coastal state. There are presently four refineries in the country, two in Rivers State and one each in Delta and Kaduna states with toatal capacity of 445,000 barrels per day, all of which are publicly owned and performing abysmally below expectation. This has led to the country relying on imported refined petroleum products to run its economy.
Aliko Dangote, Africa’s richest man and president of the Dangote Group, had already sealed a deal with Lagos state, and relevant agencies of the Federal Government to establish what is proposed to be the biggest oil refinery/petrochemical plant in sub-Saharan Africa, to be sited within the Lekki Free Trade Zone (LFTZ) in Ibeju/Lekki area of Lagos state.
BusinessDay gathered from close sources that the new investors are in discussion with the state government to facilitate the establishment of the refineries in two different areas of the state.
The state government is said to have welcomed the idea, and is presently studying the proposals through its ministry of Energy and Mineral Resources.
“The state government is in discussion with the oil firms and is studying their proposals. What the government would not want to see happen is the type of environmental degradation in the Niger Delta. So the issue of Environmental Impact Assessment (EIA) and the location is important”, the source told BusinessDay .
The Lagos State government has so far shown more than a passing interest in the oil and gas sector. A little over three years ago, the state established the ministry of Energy and Mineral Resources, and took a step further to establish the Lagos Oil and Gas Corporation, aimed at optimising the benefits of oil and gas in the country.
Recently, the state governor, Babatunde Fashola, introduced Dangote to representatives of the communities.
The Dangote Group is investing about $9 billion in the establishment of an oil refinery/petrochemical company within the LFTZ, which sits on about 16,000 hectares of land.
Dangote had during the visit, assured that the communities stood to benefit enormously, as over 8,000 engineers would be trained, while jobs would be created for youths of the communities, adding that “the zone also holds enormous economic benefits for Lagos State and Nigeria.
“For instance, there is no way we can put down over $9 billion of our money here without making sure that the zone is going to work. Looking at what the governor has done by bringing this here, I can assure that this is going to be the biggest free trade zone in the African continent and I know that the people will begin to show their appreciation”, Dangote said.
With the introduction of Dangote to the communities, Fashola had said that “the Lekki Free Trade Zone is beginning to take shape. The master plan is being realised, investors are trouping in. Tank farms and major refineries are springing up to service the demands of the country and make room for export.
“The refineries create a major selling point and release of the opportunities that lie ahead in this zone create opportunities for the local people and the potentials for Lagos and the Nigerian economy.
“We have reached an agreement in public. There has been a clear understanding today. We spoke in both local language and dialect and you can see that by clear show of hands, the people themselves have given their support. It wasn’t a voice vote; it was a unanimous show of hands that they want this project; so we are ready to go.”
Olusola Bello & JOSHUA BASSEY
