In this blog, we explained the general requirements and guidance Information for the establishment of Modular Refineries in Nigeria.<\/p>\n
It also highlight some\u00a0important general and\u00a0technical requirements for interested investors in refineries to enable smooth implementation of\u00a0the initiative.<\/p>\n
Top points:<\/strong>\u00a0Modular Refineries In Nigeria Requirements, Key Objectives of the Modular Refinery Initiative , Scope, Technical Specification , Financial Status, Fiscal Incentives , Government Support,\u00a0Community Involvement , Qualification Requirements, Investors Category, Modular Refinery Business Model,\u00a0Location and Carrying Capacity, Legal Framework.<\/p>\n The strategy to reposition the Nigeria Oil & Gas industry, a roadmap of short and\u00a0medium term priorities aimed at developing a stable and enabling Oil and Gas landscape with\u00a0improved transparency, efficiency, stable investment climate and a well-protected environment,\u00a0tagged \u201c7big wins\u201d was developed and launched by His Excellency, Mr. President in October\u00a02016.<\/p>\n The\u00a0strategy was anchored in fourth initiative in the roadmap, \u201cRefineries and Local Production Capacity\u201d seeks to transit\u00a0Nigeria from being an import dependent Nation into a net exporter of refined petroleum products. <\/p>\n <\/p>\n It is the intention of government that the refineries should be scalable and located within refinery\u00a0clusters for effective operations and minimal environmental footprint. \u2022 To promote availability of petroleum products in the country. Legal Framework<\/p>\n The process for establishing a Petroleum Refinery in Nigeria is regulated by the Department of\u00a0Petroleum Resources (DPR) through Polices and Regulations promulgated by the Ministry of\u00a0Petroleum Resources and Minister of Petroleum Resources respectively. The regulatory procedure\u00a0is laid out pursuant to Regulation (2) and (3) of the Petroleum Refining Regulations (PRR) of 1974\u00a0made under section 9 of the Petroleum Act 1969. Furthermore, under Regulation 47 of the PRR, the\u00a0Director, Petroleum Resources may from time to time, give directions as to the manner of\u00a0compliance with any matter provided for under the PRR regulations.<\/p>\n Consequently, DPR has concluded the review of the guidelines that shall apply for the\u00a0establishment of Hydrocarbon Processing Plants and also issued an addendum \u201cSupplementary\u00a0guidelines for the Design, Construction and Operation of Modular (mini) Refinery Plants in Nigeria\u201d\u00a0which details mandatory requirements, processes and procedures that will significantly simplify <\/p>\n <\/p>\n Scope<\/p>\n The guidelines shall cover all refinery establishment. However, establishment of modular refinery\u00a0plants, shall be with design capacity not more than thirty thousand barrels per day (30,000BPD).\u00a0When the plant capacity exceeds 30,000BPD, the plant shall be upgraded to a full conventional\u00a0refinery.<\/p>\n Location and Carrying Capacity<\/strong><\/p>\n The location of a modular refinery shall be strategic and influenced by proximity to the source of\u00a0crude oil, producing marginal fields and tie-in to supply infrastructure or clusters<\/p>\n Government also recognizes that there is a limit on the carrying – capacity in each of the oil\u00a0producing states, consequently, establishments would be based on the acceptable carrying\u00a0capacity indices of each state which is determined by the production capacity, access to\u00a0infrastructure and limit of the environmental degradation.<\/p>\n Modular Refinery Business Model<\/strong><\/p>\n Government envisages amongst others, a model that will be private-sector led partnership with\u00a0equity participation from the state government or its agencies, registered local cooperative\u00a0societies and the integration of the regional refinery stakeholders, with the private investor having\u00a0majority equity as well as operate the Joint Venture. Investors Category<\/strong><\/p>\n The Federal Government seeks the participation of credible investors and integration of key\u00a0stakeholders in the modular Refinery initiative. The size of the investment structure will determine\u00a0significantly the investor categorization and selection process.<\/p>\n The prospective investors will be categorized as follows: B<\/strong>. Public-Private Partnership with credible participation from relevant stakeholders such as\u00a0foreign technical partners, State Government, MDAs, Local Govt. Council, organized\u00a0private organizations, cooperative societies, community equity contribution etc.<\/p>\n C<\/strong>. Regional refinery stakeholders involved in artisanal activities with focus to converting the\u00a0vocationally acquired skills to cognitive technical skills. They shall be considered for equity\u00a0partnership with technical and financial partners.<\/p>\n <\/p>\n A sustainable and transparent framework is provided for the selection of potential investors, and\u00a0shall take cognizance of the existing guidelines and objectives of the Refinery Expansion plan. General Criteria<\/p>\n a) Institutional Framework – Company and Organizational Structure<\/strong> b) Financial Status<\/strong> c) Community Affairs, Safety, Health, Environment and Security (CASHES)<\/strong> d) Nigerian Content<\/strong> <\/p>\n a) Plant Philosophy Model<\/strong> <\/p>\n The process of integrating the regional community stakeholders into the scheme shall involve the\u00a0following activities to be anchored by the relevant State Government or its agencies using their\u00a0local structures:<\/p>\n a) Verification of community participants: This involves the screening and capturing of data\u00a0for indigenes interested in gainful employment in the refineries and small medium\u00a0enterprise activities.<\/p>\n b) Training: Focus on formally converting community stakeholders who have acquired\u00a0vocational skills to cognitive technical skills.<\/p>\n c) Business Integration: Integration of this stakeholders as equity participants in the refineries\u00a0as defined in Investor Category C.<\/p>\n The Federal Governments assistance in the establishment \/ Conventional of a modular refinery will b. Facilitation of Ownership-joint venture investment vehicles with organized host communities\u00a0and State Governments.<\/p>\n Modular Refineries being midstream oil and gas processing facilities shall qualify for all incentives\u00a0enumerated under section 39 of the Companies Income Tax Act CAP. 60 LFN 1990. The relevant\u00a0provisions of the act are; (i) A company engaged in gas utilization (downstream operations) shall be granted the following\u00a0incentives, that is-<\/p>\n (a) an initial tax free period of three years which may, subject to the satisfactory\u00a0performance of the business, be renewed for an additional period of two years;<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" In this blog, we explained the general requirements and guidance Information for the establishment of Modular Refineries in Nigeria. It also highlight some\u00a0important general and\u00a0technical requirements for interested investors in refineries to enable smooth implementation of\u00a0the initiative. Top points:\u00a0Modular Refineries In Nigeria Requirements, Key Objectives of the Modular Refinery Initiative , Scope, Technical Specification , […]<\/p>\n","protected":false},"author":1,"featured_media":4518,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[2],"tags":[1132],"class_list":["post-4517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-modular-refineries-requirements-in-nigeria"],"acf":[],"yoast_head":"\n
\nThus, presenting huge investment opportunities in the mid – downstream sector that will result in\u00a0GDP growth and jobs creation.
\nA key component of this initiative is Government support for the establishment of third party\u00a0financed Greenfield and modular refineries for in-country petroleum products sufficiency that will\u00a0stimulate products export.<\/p>\nRead: FG FINANCIAL SUPPORT FOR MODULAR\u00a0REFINERY IN NIGERIA<\/a><\/strong><\/h3>\n
\nThis document therefore highlights essential guidance information, some important general and
\ntechnical requirements for interested investors in refineries to enable smooth implementation of
\nthe initiative.<\/p>\nKey Objectives of the Modular Refinery Initiative<\/h2>\n
\n\u2022 To conserve foreign exchange utilization for the importation of Petroleum Products.
\n\u2022 To promote socio economic development in order to stop restiveness, criminal and illegal\u00a0refinery activities thereby sustaining peaceful coexistence in the Niger Delta Region
\n\u2022 To mitigate and eliminate environmental degradation associated with illegal refinery\u00a0activities, crude oil theft and pipelines vandalism.<\/p>\n
\ncompliance.<\/p>\nRead: Company\/ Business Registration Service<\/a><\/h2>\n
\nState Government contribution could be in the form of land-for-equity and or paid off shares.<\/p>\n
\nA<\/strong>. Private Investor with financial and technical capacity, preferably with established Nigerian\u00a0presence or partnership<\/p>\n<\/h2>\n
Read: DPR Permits & Requirements\u00a0<\/a><\/h2>\n
Modular Refineries in Nigeria Qualification Requirements<\/h2>\n
\nThe licensing processes as prescribed in the guidelines for the establishment of Hydrocarbon\u00a0Processing Plant in Nigeria by Department of Petroleum Resources (DPR) are in three phases\u00a0namely
\n(a) License to Establish (LTE),
\n(b) Authority to Construct (ATC)
\n(c) License to Operate (LTO).
\nTo qualify and move between phases requires certain criteria to be satisfied. Section 9 and 10 of\u00a0this document presents some of the key general and technical criteria which interested investors\u00a0must satisfy.<\/p>\n
\nEvidence of CAC registration for Nigerian companies\/entities, foreign companies\u00a0evidence\/reference by Home Country\u2019s agency. For consortium partnership, foreign and\u00a0local companies must meet standard criteria and present legal documents of partnership,
\ncertified true copies of Memorandum and Article of Association, Evidence of joint\u00a0venture\/partnership Agreement, Company Profile etc.<\/p>\n
\nThree (3) years Audited Account, Financial report and Tax Certificate for Nigerian\u00a0companies and similar documentation for foreign companies, paid up share capital,\u00a0Investment Type, Detailed financial plan with Proof and source of funding, sworn affidavit
\nand letter of authority allowing verification of all claims<\/p>\n
\nHealth, Safety and Environment (HSE) Plans, Quality Management System, Security Plans,\u00a0Management of Change Procedure, Community Affairs and Corporate Social\u00a0Responsibility Plans.<\/p>\n
\nApplicants will be required to maximize the utilization of local human and material\u00a0resources in line with Nigerian content requirements.<\/p>\nModular Refineries\u00a0Technical Specification<\/h2>\n
\nThe requirement is as outlined in DPR guidelines for the establishment of Hydrocarbon\u00a0Processing Plant and the Supplementary Guidelines for Modular Refinery Plants. Investors\u00a0are expected to demonstrate a positive crack spread for the chosen refinery design.
\nThis includes but not limited to the following: Plant description and configuration, — desired\u00a0output, management of light products and by-products (Gasoline, Naphtha, LPG &\u00a0Heavy-ends), Details of marketing plan\/strategy, Details of technology, Crude assay and
\nSource, Front End Engineering Design etc.
\n
\nb) Age of Modular Refinery to be located<\/strong>
\nAn applicant shall not be allowed to relocate a refinery that is older than Ten (10) years in\u00a0operation from the date of establishment.
\nWhere the refinery has not been in operation since establishment and well preserved,\u00a0subject to verification, it should not be older than 15years from the date of establishment.
\nDPR will provide a plant technical audit checklist for this purpose.<\/p>\n<\/h2>\n
Read:\u00a0Alumni Management System \/ Software In Nigeria<\/a><\/h2>\n
Community Involvement in Modular Refineries<\/h2>\n
Government Support\u00a0in Modular Refineries<\/h2>\n
\ninclude:
\na. Facilitation of crude commercial agreements from marginal and other oil fields.<\/p>\nFiscal Incentives\u00a0for Developing\u00a0Modular Refineries in Nigeria<\/h2>\n
\nModular Refineries being midstream oil and gas processing facilities shall qualify for all incentives\u00a0enumerated under section 39 of the Companies Income Tax Act CAP. 60 LFN 1990. The relevant\u00a0provisions of the act are;<\/p>\nRead: Debt Recovery\/ Collection Service in Nigeria<\/a><\/h2>\n