The Edo State government-backed Edo Modular Refinery has begun production at its 6,000bpd plant in Ologbo, Ikpoba Okha Local Government Area.
The facility with its feedstock can produce 50% of diesel (500,000 litres), 25% of naphtha (300,000 litres) and 20% of Low Pour Fuel Oil (LPFO) (200,000) litres.
The company got its first supply of 10,000 barrels of crude feedstock from Decklar Resources Inc. and its co-venturer, Millennium Oil & Gas Company Limited, which operates the Oza Oil Field.
The refinery was developed by Edo Refinery and Petrochemical Company Limited (ERPC) with support from the state government through a Memorandum of Understanding (MoU).
The company, in a statement cited by BizWatch Nigeria, stated that it would complete the phase II of the project in March, 2023, which adds 12,000bpd capacity to cap production at 21,000bpd.
Edo Modular Refinery is the first of two refinery projects in the state, alongside the Duport Refinery, which is operated by Duport Midstream Company Limited. The two modular refineries were attracted into the state on the back of nuanced reforms by the Governor Godwin Obaseki-led administration to boost investment inflow and drive industrialisation in the state.
The delivery of 10,000 barrels of crude from Decklar and Millenium to Edo Refinery was conducted under the terms of the sales agreement of which an invoice has been issued and payment received.
The initial agreement provided for deliveries totaling 10,000 bbls, and a new agreement is being negotiated for the delivery of an additional 30,000 bbls.
According to the statement, the parties are also in discussions to potentially agree upon a monthly minimum quantity of barrels of Oza Oil Field crude to be sold to the refinery going forward.
“Decklar and Millenium have received payment on the first invoice for delivered crude under the 10,000 bbls sale agreement with Edo refinery,” Decklar, a Canadian producer of Nigerian marginal oil fields was quoted to have said.
It noted it had also issued an invoice for delivery of the first 5,000 bbls as part of the 30,000 bbl sale agreement with the Edo Refinery with payment expected in approximately three weeks.
“With continued production and delivery of crude oil it is expected that regular billing and receipts of sales proceeds will occur,’’ Decklar said.
According to Decklar, trucking of oil from the Oza Field is ongoing to the Edo refinery facility in Edo State, Nigeria.
“Ten trucks are currently in operation and are capable of delivering approximately 2,500 bbls every four days. Additional trucks are expected to be contracted over the next few weeks to increase delivery capacity,” Decklar said.
Why FG is backing Edo Modular Refinery, and others
The Federal Government has contined to show support for the development of modular refineries across Nigeria to reduce the importation of refined petroleum products.
Although the FG is refurbishing the Port-Harcourt, Kaduna and Warri refineries, the FG has said it is important to also develop modular refineries.
Earlier in January 2023, the FG announced that it had acquired shares in the 12,000 bpd Azikel Modular Refinery in Bayelsa state; the 5,000 bpd Waltersmith Modular Refinery in Imo state; and the 2,500 bpd Duport Modular Refinery in Edo state.