Finding alternative solutions to resolving midstream challenges

Illegal refining and pipeline vandalisation are two of major challenges confronting Nigeria’s midstream oil sector. JOHN OFIKHENUA reports that the Federal Government might have found a creative way to encourage addressing the problems.

The Federal Government seems to have found a way around the menace of illegal refining and pipeline vandalism. Leading a delegation of the Federal Government on an inspection tour to the ongoing Ebenco Global Link Limited refinery in Koko, Delta State, Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Director of Liquid, Ngozi Nwankwo, discovered innovative solutions with local content in the 1000 BSPD modular plant.

The team also assessed the double thermal desorption unit, tank farm, waste management recycling unit, workshop, primary storage tank for only waste treatment, boiler for sludge treatment, among others.

Enthralled by the global technology that was domesticated at the facilities, the minister described it as a pilot project, which operators of illegal refineries should emulate to replicate modular refineries across the country. He was upbeat that the measure will bring the illicit enterprise of coal fire refining, its concomitant issues of crude oil theft and pipeline vandalisation to an end.  He depicted the plant as a global brand because of its strategic partnership with China to turn out the best quality products. With the Ebenco model, the minister submitted that it is better to engage illegal operators, give them credit facilities, make them procure feedstock (crude oil) in Naira at the prevailing exchange rate and sell the products legitimately. According to him, finding an answer to tackle the illegal refining issue has always been a reoccurring decimal. The minister was however elated that he found the answer at the Ebenco refinery.

He said: “The government is real committed to promoting local companies like Ebenco. It is committed to partnering with companies towards solving some of the problems that we are having. One of the biggest questions I ask people who are doing coal fire refining, why can’t we have improved machinery that could be used to refine this crude and resold to these men who are breaking pipelines and stealing the crude? Why can’t we work out an institution where we can have an improved refining like Ebenco is doing replicate it across?

“Today, I am here to find an answer to that question. If Ebenco is able to build a refinery that will refine products that meet international standards, it is easier for the government to.come up with fund and procure that and then give to different groups across the country.

“They will be given crude and pay for it in Naira the dollar equivalent because crude is sold in dollar. So even if you want to pay in dollar it has to be on the prevailing exchange rate.

“Instead of someone going to China to look for refineries, you have brought the Chinese partner here who will do all the things and come up with quality refining”.

Speaking with reporters after his tour on the facility, Lokpobiri reiterated government’s readiness to support intending investors with credit facilities. Unfolding how government will enforce the plan, he said the operators will buy crude oil, pay tax and interestingly, generate employment. The scheme, according to him, would be mutually beneficial to both the government and those presently indulging in the perilous illegal refining of crude oil.

His words: “Producing modular refineries locally is one of the solutions to pipeline vandalisation that is going on by those who want to do illegal refining.

“When Ebenco modular is completed, we want to see how this could be replicated in collaboration with stakeholders so that those who are breaking pipelines don’t need to break pipeline. 

“They need to just acquire this (modular refinery) and if they don’t have money we will see how we can procure for them. And then they will pay back in over a period of time. We have to find ways to solving that problem vandalisation by those who are doing coal fire. By the time we come up with this solution, they will buy the crude, pay taxes, we will have sustainable employment for them and at the end of the day, it will be win-win for everybody.”

He expressed satisfaction with the level of establishment the indigenous modular refinery has reached. Lokpobiri pledged to commission the plant when it is completely established. According to him, in partnership with Chinese and others, Ebenco has acquired technology and domesticated it in line with global standards.

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The minister said, “This is what other countries do, you acquire technology and then domesticate it.

 You bring it home. When I got here and saw Ebenco in partnership with partners from other countries with a view to ensuring that whatever it produces in this place will meet global standards. So, I am very impressed with what I am seeing and it is what is recommended for those who want to operate in the midstream. Anybody who wants modular refineries instead of going outside the country should come to Ebenco and then see what is being done here.”

He pledged Federal Government’s support for the fledging local modular refinery. The minister vowed to draft the Nigerian Content Development Monitoring Board (NCDMB), Executive Secretary, Engr. Felix Ogbe and the management team to assess Ebenco modular refinery for possible partnership.

Similarly, the NMDPRA Director of Liquid, Ngozi Nwankwo, said the plant will proffer solution to local illegal refining. According to her, the business is capital intensive aside from the challenge of accessing crude oil . The assessed refinery, she said, has advantage over every other refinery in the country because it is built to shut down when there is no crude oil unlike the others ones that remain in operation unnecessarily, resulting in higher cost of production. She added that it is a total departure from the past as where refineries in Nigeria are built to operate and only shutdown in case of emergency.

“It is a total departure from what we normally have, which has been a stumbling block to those who want to establish refineries because it is capital intensive. So the refinery has a different concept. The normal concept for every refinery in Nigeria is that it is built to operate and never shutdown except in time of emergency. But this one is built on the latch process. You don’t have to be in operation if you are not,” said Nwankwo.

  She confirmed the refinery has brought innovative local technologies to bear which even NMDPRA has to understudy. She said the refinery will not grapple with paucity of fund like other modular refineries because of its unique local technology.

Meanwhile,  the Ebenco Chief Executive Officer, Ebenezer Oluwagbemiga Akin said the plant is at its final stage of development. According to him, the government’s clamour for a solution to the scarcity of petroleum products spurred him to commence the establishment of the refinery. He said although the company has a license for 30,000 barrels per day plant, it is developing 1000 bspd capacity at the moment. The firm, he said,  is already looking forward to inviting the minister for the commissioning of the modular refinery.

A modular refinery has capacity to produce Automotive Gas Oil (AGO) diesel, Kerosene, Naphtha and FPSO, he said stressing “that is what the main license is for.”

He described the facility is a practical demonstration of Nigerian industrial capability and responsible value recovery. In his analysis of the plant, he said “Through thermal desorption, filtration, water treatment, oxygen support systems, and local fabrication, we turn complex petroleum-related streams into useful outputs while reducing waste and environmental risk.”

He held the same view with Lokpobiri that the  bigger value is jobs, and stronger local engineering capacity, stressing it will crash import dependence, and result in  alignment with national priorities on energy efficiency and sustainability.

In order to address environmental concerns, the CEO said, “Safety and environmental stewardship are non-negotiable for us. We operate strictly within regulatory standards, maintain robust HSE systems, and invest in trained personnel, monitoring, and disciplined procedures. Our technology is designed for controlled processing, safe recovery, and minimal environmental footprint. We want growth, but only the kind that is safe, compliant, and sustainable”

Although the NMDPRA issued a license for 5,000BSPD to the company, the development of 1,000 BSPD phase one, is now close to commissioning.

Oluwagbemiga said, “We are scaling in phases. Phase Two is underway to expand capacity and deepen integration across processing and fabrication. Our goal is to build a replicable, Nigerian-led model that can grow responsibly and serve wider national needs.”

The indigenous firm is not on its own, it is aligning with international technical partners to transfer the skills and innovation to Nigerians.

On the partnership that is driving the plant, he said “We welcome partnerships that support local content, technology transfer, and responsible investment. When government and private sector align on shared outcomes, industrial growth becomes faster, safer, and more impactful.”

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What actually impressed the minister to express satisfactory remarks on the refinery was the nature of partnership. Instead of traveling to China for the expertise, the firm brought its technical partner, Mr. Wang Jianhui, who has an avid knowledge in oil and gas. Besides, the partner confers the advantage of Original Equipment Manufacturer (OEM) on the refinery. He is present at the plant to train and retrain Nigerians on equipment manufacturing,  drilling rig, oil and gas field management.

His words: “Chairman has visited our city with me. We have an oil city and there is so much relating to oil and gas. We have experience in equipment manufacturing, drilling rig and we have so much experience in oil field management, refining and so much.

“We want to be the technical partner for Ebenco to support Ebenco to get more local content. We start by training our local engineers.”

Both the government and operator are optimistic that a replication the Ebenco Refinery model can rescue the country from the present battle with pipeline vandals, illegal refiners and environmental pollution. However, since talking tough is easier in a dreamland, only their action and inaction, nothing else hinders the players from realising their plan.