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DPR issues new guidelines for establishing modular refineries

DPR issues new guidelines for establishing modular refineries

UGO AMADI
ASSISTANT BUSINESS EDITOR –
The Department of Petroleum Resources (DPR) has issued new guidelines for the establishment of hydrocarbon processing plants. It also issued an addendum “supplementary guidelines for the design, construction and operation of modular refinery plants in Nigeria”,

According to the DPR, the guidelines shall cover all refinery establishments, adding that the establishment of modular refinery plants, shall be with a design capacity not more than 30, 000 barrels per day (bpd).

The new guidelines became necessary to make it flexible for licensed refineries to begin operations without delay. Already, about 25 private refinery licences issued by the DPR to investors are yet to commence operation and risk having their licences revoked.

The new guidelines disclosed that the location of a modular refinery shall be strategic and influenced by proximity to the source of crude oil, producing marginal fields and tie-in to supply infrastructure or clusters. Government also recognizes that there is a limit on the carrying – capacity in each of the oil producing states, consequently, establishments would be based on the acceptable carrying capacity indices of each state. This is determined by the production capacity, access to infrastructure, and limit of the environmental degradation.

It stated: “Government envisages amongst others, a model that will be private-sector led partnership with equity participation from the state government or its agencies, registered local cooperative societie and the integration of the regional refinery stakeholders, with the private investor having majority equity as well as operate the Joint Venture. State Government contribution could be in the form of land – for –equity and or paid off shares.”

DPR disclosed that the Federal Government seeks the participation of credible investors and integration of key stakeholders in the modular refinery initiative. It noted that the size of the investment structure would determine significantly the investor categorisation and selection process.

The new guideline noted that an applicant shall not be allowed to relocate a refinery that is older than 10 years in operation from the date of establishment.
It said that where the refinery has not been in operation since establishment and well preserved, subject to verification, it should not be older than 15 years from the date of establishment.
DPR said applicants would be required to maximise the utilisation of local human and material resources in line with Nigerian content requirements.

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