Daily Independent Online.
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Monday,July 19, 2004.
‘It costs N132 billion to build 100,000 pbd
refinery‘
By Charles Okonji
Senior Business Correspondent, Lagos
As the nation continues to search for solutions to
its refineries’ problems, the Group Managing Director of Peacegate Group
of Companies, Mr. Ayorinde Adedoyin, has said that to build a new refinery of
100,000 barrels per day (pbd) capacity would cost about N132 billion (about $1
billion).
Adedoyin, whose company’s subsidiary, Peacegate Oil and Gas,
bidded for gas distribution through pipelines to Ikorodu, Lagos, also said that
the feasibility study he conducted on the building of a refinery of 45,000
barrels per day capacity indicated
that it would cost about N85.800 billion (about $650 million).
He said that because of the huge capital requirement
of the project, Nigerian investors have been finding it difficult to raise the
money, stressing that that was why the 18 companies the Department of Petroleum
Resources (DPR) issued licences to build private refineries have not started
the projects. Adedoyin stated that
even when the investor could raise the money offshore, they had often found it
difficult to get bank’s guarantor, as the capital base of most Nigerian
banks are below 10 per cent of the total amount of money required to construct
the refinery.
Adedoyin added: “To get into refinery, you need
about $650 million to build one.
That amount is about N85 billion. How many banks in Nigeria can finance
it? About 40 banks. I have looked into it. Some of my foreign partners assured
me that they could bring the money, but the only institution that could
guarantee it and they would feel comfortable with it would be the Federal
Government.
“Why do you think the 18 companies issued the
licences could not take off. They can easily get money offshore, but which bank
would guarantee the money for them. I have done a feasibility studyfor 45,000
barrels per day refinery and 100,000 barrels per day refinery. The refinery of
100,000 barrels per day would cost about $1 billion, which is about N132
billion, to build,” he added.
Nigeria consumes about 30 million litres of premier
motor spirit (PMS) per day, while the country’s four refineries, including the Port Harcourt Refining Company
(PHRC), Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and
Petrochemical Company (KRPC), could only refine about 18 million litres per
day.
The short-fall had made the nation to resort to fuel
importation to augment the domestic demands of PMS, thus making some energy
experts to canvas for more refineries in the country.
