Nigeria, Niger Republic Collaborate on Construction of 150,000 bpd Refinery

Nigeria and the Niger Republic on Tuesday made some progress on the planned construction of a 150,000 barrels per day (bd) processing capacity refinery to be built in a border town in Katsina between both countries.

Both countries in Abuja, set up two task teams to be jointly managed by officials from them. They said they will get the private sector finance to execute the projects.

The task teams which were inaugurated by President Muhammadu Buhari, alongside the President of Niger, Mahamadou Issoufou, would develop a detailed project implementation roadmap that covers bankable feasibility studies for the refinery and associated pipeline project; optimal project site and pipeline routes; security plan; as well as selected consortia of investors for the projects.

Headed by the Minister of State for Petroleum Resource, Dr. Ibe Kachikwu, and his Nigerien counterpart, Foumakoye Gado, the teams would be expected to submit their report by December 2018, after which implementation of the project would commence and possibly last over two years.

Speaking at the ceremony, which held at the State House, Buhari said the initiative would provide a reliable market for stranded crude oil volumes from the Niger Republic, as well as provide petroleum products for Nigeria to enable it exit importation of refined products as she planned to do in 2019.

He noted that the project will be private sector driven with the full support of the governments of both countries.

“Nigeria and Niger have excellent relations for several decades, as neighbours sharing a long border with common cultural and historical ties. Nigeria sees this cooperation on crude oil export from the Republic of Niger and construction of refinery facilities in Katsina State as a win-win for both nations,” said Buhari.

He further stated: “In addition, it is my hope that the current frontier exploration efforts in the northern part of the country (Chad Basin, Gongola Basin, Sokoto Basin, Bida Basin and Benue trough) will also result in the  provision of additional hydrocarbon inflow to the corridors of the proposed pipeline and a potential refinery around Kaduna axis.

“I am happy that several productive engagements held between the Nigerian and Nigerien authorities have resulted in the positive agreements to progress with activities on this important project.”

Inaugurating the task team, the president said: “A steering committee has been set up to be chaired by the Nigerian Minister of State for Petroleum Resources and the alternate chairman is the Nigerien Minister of Petroleum, to provide strategic leadership, direction and governance oversight for the project.

“Further to this, a senior level joint technical team is carefully selected based on competence to develop the implementation roadmap and strategy on both the refinery and pipeline projects. This team will be led by Nigeria’s engineer, Rabiu Suleiman, supported by the Director General Hydrocarbon of Niger Republic.”

 Nigerien President, Issoufou, also agreed with Buhari and stated that the project would strengthen existing economic and political ties between both countries.

He said: “The country sees the refinery as a way of uniting with the country after being separated by colonialism. The initiative remained a way growing intra-African relationship.”

Issoufou also suggested that African countries would hardly develop if they concentrated on export of raw resources as against processed goods. He thus asked Nigeria to lead in ensuring the oil and gas sector of the continent is developed.
He also said Niger will sign the African Continental Free Trade Agreement (AfCFTA) to expand her economy, adding that Niger would rely on Nigeria to help grow its oil and gas sector. 
 
Providing some insights into the projects, Kachikwu said the decision to build the refinery and pipeline was taken after it was discovered the initial plan to build a line to the Kaduna refinery for crude oil supplies from Niger was uneconomical.
He noted that almost nothing of both governments’ funds would be put in the projects, adding that investors were already lining up to partake in it.
According to him, about 50 investors were at the Tuesday meeting at the State House to observe the processes and firm up their initial expressions of interest.
The minister equally stated that the governments were mindful of the security challenges up north but not deterred by it, and would push on with the plan.
Niger Republic, he noted, had been least-impacted by the security challenges occasioned by the Boko Haram terrorists.
“There is a decision to build a pipeline from Niger Republic into Nigeria’s boarder town and construct a refinery with capacity probably between 100,000 and 150,000 barrels per day. It is all dependent on the Niger crude volume and what they find.

“The study has to be done and we know what is involved. The technical and financial components, negotiating the finance. We have mentally structured our minds to a two-year period but it depends on what we find,” Kachikwu explained.

He noted that Katsina was chosen to host the refinery because it was close to Niger, adding there was a potential for an extension to Kaduna.

He said the project would have “private-sector led multi-stakeholder partnership with or without equity participation from federal governments, state governments or agencies as necessary”.

“Long term contracts for the supply of feedstock, adequate funding from reputable financial institutions, provision of guarantees and incentives that will safeguard investments and returns at the setup of the company, and respect for the sanctity of contracts,” he said.

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