Modular Refineries: How Nigeria Will Exit Nations Massively Importing Petrol PricewaterhouseCoopers

THE Federal Government and other stakeholders have been advised to spend money on modular refineries because of cost effectiveness and flexibility.

oil cracking towerPricewaterhouseCoopers (PwC) which disclosed this in its newest report obtained by Vanguard added that the refineries have been usually obtainable in capacities ranging from 1,000 to 30,000 barrels per day (bpd).

It indicated that the refineries present flexibility and will be constructed in a phased manner, adding that the comparatively low capital cost and flexibility for upgrades can make it a price effective provide possibility for buyers.

‘’Conventional refineries are not as flexible as modular refineries and so they require comparatively high funding in assets and specialised labour to run, maintain and upgrade.

‘’The economic viability of a refinery is dependent on the interplay of three elements: type of crude oil used the complexity of the refining equipment (refinery configuration) and the specified kind and high quality of merchandise produced.

‘’Different varieties of crude oil yield a unique mixture of products relying on the crude oil’s pure qualities. Crude oil types are usually differentiated by their density (light/sweet and heavy).

‘’Heavy crude tends to produce a bigger yield of lower-value merchandise (gasoline oils) and also requires important funding within the refining process. U-tube heat exchanger However, light, sweet produces large yield of higher-value products (transportation fuels) and requires less investment in the refining course of.

‘’Nigeria presently produces gentle, candy crude, meaning Nigerian refineries may be able to source and course of crude at decrease charges, increasing the viability of refining property, significantly modular refineries which have lower feedstock necessities.’ /p>

The corporate additionally said that a key requirement for refining profitability is discovering the candy spot between value of inputs and worth of outputs in a extremely risky setting influenced by global, regional, and local provide and demand fluctuations.

It disclosed that refineries have minimal influence over the worth of input and outputs and, therefore, must ensure operational effectivity to enhance profitability and acquire aggressive edge.

‘’This entails decreasing operating prices equivalent to labour, upkeep, energy (electricity and pure gasoline) and 2000m3 storage tank many others. to the barest minimum. Effectivity is achieved by way of operational excellence, innovation, upkeep & upgrades and optimisation to supply extra output from fewer inputs.

‘’Although refineries share sure similarities, each refining asset is a novel and complicated industrial facility, with some flexibility in the crude slate it may course of and the mix of product yields it might refine. coal Factors akin to refinery configuration and complexity immediately affect refinery end merchandise while location and transportation infrastructure influence power, labour and compliance costs.’ /p>

The corporate added that: ‘’Over the final 4 decades, Nigeria has constantly struggled to maintain its refineries functioning optimally. Despite having a nameplate refining capability that exceeds demand, Nigeria ranks because the third highest importer of petroleum merchandise in Africa, importing over 80% of products consumed. In spite of the setbacks, the inherent alternative for Nigeria’s erstwhile dormant refining sector holds shiny prospects for the long run and recognition of key drivers will accelerate the imminent refining revolution.

‘’This paper gives a studious analysis of the current state of the refining sector and the refining revolution we predict will happen over the subsequent three-5 years. It draws consideration to the prevailing gaps in the provision of refined petroleum products in Nigeria and the West African area and it highlights the sizeable potential for home refining of petroleum merchandise.

‘’Importantly, it identifies key drivers that can spur the growth of the refining sector in Nigeria. Lastly, this paper highlights refining asset economics and structural industrial considerations for buyers and identifies the modular refinery, an off-the-shelf solution, as the fee efficient supply choice for buyers particularly when diesel is the lightest yield.