LONDON, July 23, 2012 /PRNewswire/ --
The Nigerian government has signed a Memorandum of Understanding with US firm Vulcan Petroleum Resources and Nigeria's Petroleum Refining and Strategic Reserve to build six new oil refineries in a deal worth $4.5 billion. Two of the plants, each of which will have a capacity of 30,000 barrels per day, are set to be operational within a year.
Nigeria - Africa's top oil producer - has been held back by its lack of refining capacity, which has made it a net importer of processed crude and subject to global price fluctuations. Until recently, a generous fuel subsidy protected consumers from high import prices. Though not yet lifted entirely, six months ago President Goodluck Jonathan announced that this support was no longer affordable.
Funded by foreign investors, the Vulcan deal will help Nigeria meet its growing domestic fuel demand by developing its own infrastructure instead of continuing to rely on crude exports.
Owing to the local challenges of building them from scratch, the consortium has opted for modular refineries; each plant will be built and tested in the US before being shipped to Nigeria for reassembly near existing pipelines. Once fully operational, their combined capacity will be 180,000 barrels (roughly 30 million litres) per day.
Commenting on the deal, Nigerian-born international businessman Kola Aluko called it a 'landmark' in the development of Nigeria's industrial base.
Aluko, deputy CEO of the independent oil and gas firm Seven Energy International, said: "This is a significant step for Nigeria in its progress towards industrial maturity.
"The investors involved have made it clear that they see Nigeria as a good place to do business, and this is exactly the kind of endorsement we need. Nigeria is rich in raw materials and human capital, but until now has lacked the modern infrastructure necessary to unleash that growth potential. That is about to change."
SOURCE KA News