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POSSIBLE IMPACT OF MODULAR REFINERIES IN THE SUPPLY OF PETROLEUM PRODUCTS IN NIGERIA

by AMADI, UGWUNNA (G2017/MSC/CGRP/FT/069)


Crude oil in its natural state has little practical use, but when it is refined we can end up with petrol, diesel, jet fuel, and liquid petroleum gas (LPG), gas oil, heating oil and residues such as bitumen.

Through refining, by-products for lubricants most importantly for petrochemicals can be obtained, and considering the high demand for refined products, the increased agitation for more efficient modalities for refining crude oil is justified. Over the last four decades, Nigeria has consistently struggled to keep its refineries functioning optimally. Despite having a nameplate refining capacity that exceeds demand.

In spite of the setbacks, the inherent opportunity for Nigeria's erstwhile dormant refining sector holds bright prospects for the future and a recognition of key drivers will accelerate the imminent refining revolution. In overhauling the Nigerian oil and gas sector, it is necessary to revisit the processes by which crude oil is refined and more particularly by addressing the issue of modular refineries. Most troubled oil producing countries have modular refineries.

It is sad to note that Nigeria has emerged as the World largest importer of petrol. Also Nigeria is the only member of the Organization of Petroleum Exporting Countries importing refined products while we export crude oil. This is disheartening as we export jobs in a country with a high rate of unemployment. As at now, Nigeria is importing about one million metric tonnes of Premium Motor Spirit, PMS monthly into the country. It is shameful for a country ranked as the largest producer of oil in Africa and the fourteenth largest oil producer in the world.

I strongly believe that one of the ways we can improve the refining and availability of petroleum products in this country is the use of modular refineries.

A modular refinery is a processing plant that has been constructed entirely on skid mounted structures. Each structure contains a portion of the entire process plant, and through interstitial piping, the components link together to form an easily manageable process. Modular refineries apply process equipment manufactured in controlled conditions, fully assembled and tested prior to overseas shipment, and installed at client’s site in much less time than traditional construction requires. These may be in units from 4000 to 30,000bpd, though some are as low as 1000 b/d capacity. Lubricating oil, waxes and asphalt may not be produced in a modular mini refinery. They are flexible to meet demand, lower capacity requirement, and minimal space/ land requirement, quick and easy installation.

Mini refineries are topping units or hydro skimming which viability depends on sites close to petroleum feedstock to reduce logistics and nearness to markets to reduce distribution costs. Government incentives and generous conditions from credit agencies are required for a profitable investment. One advantage of mini-refineries is that they are skid-mounted and so faster to construct from 12 to 18 months, therefore improves engineering quality. They are flexible to meet demand changes and more modules can easily be added. The major disadvantage of the modular refinery is not as efficient as the conventional refinery, but I believe if well managed can go a long to make available petroleum product in the country.

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