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Nigeria may begin crude refining in Ghana as TOR deepens capacity with new deal

Strong indications have emerged on the deepening refining capacity of the Tema Oil Refinery (TOR) in Ghana which can now enable it to take on third party refining for some African countries whose refineries are moribund.

Statistics have shown that Nigerian four national refineries had been in comatose due to poor management and turnaround maintenance failures over time, thus forcing the economy to be losing huge sum in crude swap deals in Europe, South Africa and Israel.

However, there are facts that if Nigeria will seal refining deal with TOR, freight charges will be reduced as Ghana will become the closest country to refine for crude swap contractors of the NNPC.

This stemmed from the recent agreement sealed with Woodfield Energy Resources to process 11 million barrels of crude seamlessly.

In an interview with the Managing Director of TOR, Mr Isaac Osei, he told Business Hilights Ghana Bureau chief that Woodfield Energy Resources’ long history with the Refinery and its knowledge on energy business in Ghana and Africa powered the transaction that would ensure that TOR continued processing of crude oil into the foreseeable future in high standard and quantity.

He further explained that under the tolling model which the Refinery was currently operating, his outfit processed crude oil for or on behalf of third parties at a fee adding that this arrangement placed minimum or no risk at all on the refinery as the processor since the crude oil would be purchased, transported and marketed by the third party.

“TOR which hitherto was in the news for lack of crude, has continuously processed circa four million barrels of crude oil out of a total of 11 million barrels since August 2019, ” he disclosed.

He added that TOR was also negotiating to sign similar tolling agreements with other international traders like Gemcorp, BP, and other traders stating that the developments were as a result of guarantees on plant efficiency and effectiveness.

“After a careful diagnosis of TOR’s challenges, the Board and Management met with the workers and charged them to work in an efficient manner in order to restore the company to its glorious days and I’m happy to announce that with this new operating philosophy at TOR, our trading partners have realized that TOR is technically viable and could indeed give them value for money with the right structures in place, “Mr. Osei indicated.

In an earlier interview with Ghana News Agency (GNA) in the week, Osei noted that TOR’s new philosophy of ‘operating efficiency’ was centered around the Refinery’s Utilities section (Power House), which is the power generation hub of the refinery adding that currently, his outfit uses Refinery Fuel Gas (FG) which is generated as a by-product of the refining processes at Residue Fluid Catalytic Cracker (RFCC) and Crude Distillation Unit (CDU).

He stated however that even though the fuel gas generated at TOR was inadequate to fire the various heaters in the refinery, the short fall, was augmented with Fuel Oil in the form of Atmospheric Residue (AR) or Cracked Fuel Oil, which is a high value product, a situation Mr. Osei observed used to erode the refinery of its profit margins.

But to surmount this challenge, he noted that the commerce and technical teams of the Refinery ensured that TOR came up with both long and short term strategies which involved negotiating that all processing agreements with third parties catered for the challenge of using AR to power the boilers in the refinery as well as the setting up of a technical team which has presented an actionable plan to link TOR to VRA (Volta River Authority) to tap gas from the West African Gas Pipeline Company (WAPCO) pipeline to fire the furnaces and boilers instead of using Fuel Oil”.

Giving insights on the Refinery’s achievements since he took over its management, Osei averred that the plant prior to his appointment had missed three cycles of scheduled shut down maintenance which affected its reliability and performance stating that the Board therefore decided to embark on the much needed shut down maintenance to improve upon the performance and reliability of both the CDU and the RFCC.

While indicating that TOR had chalked a number of achievements including the full payment for a 120tph Steam Boiler which would increase steam generation capacity for plant operations and ensure reliability of the Refinery’s utilities system, he recalled that the Boiler which arrived in Ghana in October 2018 was currently being installed and was expected to augment TOR’s power generation activities upon its commissioning by the year 2020.

TOR chief executive

Osei further commended the government for the developments in the refinery, revealing that with the support of government, “TOR has completed the payment for its second heater and our capacity would be restored to the nameplate capacity of 45,000 bpsd, by the end of the first quarter of 2020. This means TOR will be able to refine 1 million barrels of crude oil in just 22 days thereby making room for more companies to refine their crude oil at Tema Oil Refienry”.