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Ogun ready for Petrolex’s $3.6bn 250,000bpd oil refinery

Public sector drive to end serial petroleum products scarcity in Nigeria got yet another boost as an indigenous investor; Petrolex Oil & Gas Limited has concluded arrangements to build a $3.6bn plant with a capacity of 250,000 barrels per day (bpd) in Ogun State.

Chief Executive Officer, Segun Adebutu, said in an interview with Bloomberg in Lagos that his group is working on the “front-end engineering design” and will complete construction in 2021.

Otherwise, the refinery is coming on stream about two years after the resumption of operations at Dangote’s 650,000bpd refinery currently being developed in Lekki, Lagos State.

Adebutu revealed further that Petrolex, had been in oil and gas industry in the last 12 years and currently the owners of a storage tank farm and other mid-stream infrastructure valued at about $330m.

The inauguration of the tank farm and the start of the refinery construction, both at the same site in Ibefun, Ogun State, is planned for this month.

The tanks are connected to a pipeline at Mosimi, which will transport products around the country, according to the CEO, who sees a big market in Nigeria’s 180 million-strong population. Petrolex will finance the refinery project with loans from local and international lenders, as well as its own revenue, he said.

The company also plans a fertilizer plant and lubricants facility as well as a liquefied petroleum gas plant, Adebutu said.

Petrolex is targeting listing on the Nigerian Stock Exchange in the next 10 years to ensure the business outlives its owners and can fund future expansion, according to Adebutu.

Business Hilights recalls that for more than 10 years now, Nigeria, Africa’s biggest oil-producing nation, lacked adequate refining capacity and imports at least 70 percent of local needs.

Besides, chances of having the existing four national refineries refurbished are getting slimmer by the day as industry analysts are skeptical that injecting funds into the repairs of the assets may not get lawmakers support any longer as there is nothing to show billions of dollars so far released for their turnaround maintenance (TAM).

The lawmakers recently asked the NNPC to come up with serious defence on why the government will be allowed to raise about $1.8bn it is currently demanding for the TAM of the four refineries.

However, our correspondent gathered that Saipem SpA and other international companies are in talks to rehabilitate the country’s three existing plants.

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