The Nation Newspaper

Tag: Dangote refinery

  • Dangote refinery will address fuel scarcity – Ambode

    Dangote refinery will address fuel scarcity – Ambode

    Lagos State Governor, Mr. Akinwunmi Ambode, on Tuesday said the refinery project being developed at the Lekki Free Trade Zone (LFTZ) by President of Dangote Group, Alhaji Aliko Dangote, would address the perennial fuel scarcity problem in Nigeria and West Africa.

    Ambode, who spoke during an inspection tour of the refinery by the Togolese President, Mr. Faure Gnassingbe, expressed optimism that the project would positively change the face of oil and gas business in West Africa.

    He said the project, which is the largest single line refinery in the world, was a testament to Lagos status as prime investment destination that has gained investors’ confidence over the years.

    He said, “This investment is one of the biggest in Africa today and will have a huge impact on the economy of not only Nigeria but the whole of West African sub-region.

    “This refinery, when completed, will be the largest single line refinery anywhere in the world refining 650,000 barrels of crude oil daily.  Apart from creating jobs, this refinery will contribute immensely to solving the fuel supply challenge in the West African region.”

    Ambode also commended the pace of work on the project, saying huge progress had been made by contractors handling the refinery.

    He also saluted the doggedness and unwavering desire of Alhaji Dangote to contribute positively to the growth of the Nigerian economy and his confidence in the Lagos economy.

  • Ondo guber aspirant laments relocation of Dangote Refinery

    Ondo guber aspirant laments relocation of Dangote Refinery

    A shipping magnate and governorship aspirant of the All Progressives Congress (APC) in Ondo state, Prince Folusho Adefemi, yesterday criticised the alleged relocation of the proposed Dangote Refinery from Ondo state to another location in Lagos state. According to him, the refinery project would have provided more than 500,000 skilled, semi-skilled and non-skilled labour force in the state.

    Speaking after his tour of the 18 local government areas to mobilise delegates for next month’s primary election, Adefemi promised that the refinery would be relocated to the state as he would use his cordial relationship with Alhaji Aliko Dangote, if he eventually gets the mandate of the people as governor, to urge a rethink.

    He noted that the loss of the project was due to the selfishness of some people at the helm of affairs in the state. The business man expressed disappointment with the alleged level of decadence and profligacy under the present government in the state.

    According to him, the over seven years of PDP’s government in the state focused more on playing politics than serving the people. Adefemi particularly flayed the state government for abandoning many projects meant to raise the standard of living of the masses. He urged the leadership of the APC to conduct a credible and transparent primary election.

  • ‘Renewables alone won’t cut it!’

    ‘Renewables alone won’t cut it!’

    Uwe Lauber, CEO of the German mechanical engineering company MAN Diesel & Turbo, talks about the energy situation and the company’s plans in Nigeria.

     Mr. Lauber, you are visiting Nigeria as part of the delegation accompanying the German Federal President. What are your impressions so far?

    First of all, let me say that it is a great honor for me to be able to visit Nigeria together with our Federal President and to be welcomed on such a high level. Nigeria is an impressive country with a buoyant and dynamically developing economy. That buoyancy is especially tangible in Lagos, a city that seems to be bursting with energy. Take for example the Eko Atlantic City project. The sheer dimension of it is nothing short of stunning. This is without any doubt one of the most ambitious land winning projects of our time.

    We are guessing you are here for business? MAN Diesel & Turbo is engaged in various fields, ranging from power generation and turbo machinery for the oil & gas industry to marine propulsion. For which segment do you see the biggest opportunities in Nigeria?

    Nigeria is already an important market for our turbomachinery business, where we are working together with the oil and gas and process industry on a number of projects. Some groundbreaking projects are being developed at the moment, e.g. the Dangote refinery, which will be of huge strategical value for the country and will turn Nigeria into an exporter of refined petroleum products instead of an importer. It is projects like this, where we see the most substantial growth potential. But Nigeria also has a developing shipbuilding industry, to which we are paying close attention. As one of the world’s leading providers of ship engines, we want to be well positioned by the time this market takes off. And then, of course, there is the energy sector, where we specialize in solutions for distributed energy generation. We already have over 60 engines for energy generation installed in the country.

    As you know, the generation of and access to electricity is one of the biggest challenges this country is facing. What is your perspective on the situation?

    The power sector is, without question, one of the key constraints on the country’s economic development. According to the World Bank, power cuts in Nigeria slow down annual growth by an average of 3-4 percent. That is very substantial. Nigeria is the biggest economy on the African continent and yet almost 50 percent of the population is without access to electricity. Imagine the untapped potential! Without a doubt, action is needed. But things are progressing, and in the past years, Nigeria has made remarkable efforts to address the situation in a systematical way: The 2013 privatization of the power sector created the foundation on which an electricity market based on rules, efficiency and reliability can develop. Going forward, it will be essential to generate the trust and incentives needed for independent power producers to further invest in and expand the generation capacities and distribution infrastructure.

    What technical solutions do you recommend for the country’s energy challenge?

    With regards to generation capacities, I think flexibility is key, which is why distributed energy solutions based on gas or dual-fuel engines are well-suited to Nigeria. They are very efficient and can feed into the grid or operate in captive mode. And this technology also works well with renewable energies, like solar or wind power, which offer a huge potential in Nigeria.

    The Nigerian government intends to increase the share of electricity from renewables to 23% by 2025 and to 36% by 2030. Coming from a country that has already reached a +25% share – any advice?

    It’s hard to compare the situations: In Germany, the main challenge was and still is to completely restructure an energy system that has evolved over decades in a short period of time. In Nigeria, it is about building up a new energy system, partly from scratch – a system that needs to supply twice as many people, in a country that is almost three times as big as Germany. Having said that, I think there are three lessons that we had to learn the hard way, which might be of general value: First, “Make a plan and share it!” – Get all the players to the table and let them know where the journey is going. Secondly, “Don’t forget about the grid!” – It needs to carry the load and takes a lot of time to build. And thirdly, if it is also climate protection we are talking about, “Renewables alone won’t cut it.” You need to choose the right back-up as well.

    What would be the right back-up in your eyes?

    In Germany, we have been facing the seemingly absurd situation of constantly rising shares of renewable energy generation and rising CO2 emissions at the same time. What had happened was that more and more subsidized renewable energy pushed into the market and led to a drastic erosion of wholesale prices for electricity. As most gas-fired power plants could not compete on that price level, the share of energy generated from coal increased. And that had a significant impact on the carbon footprint. What this has taught us: Renewables need a fossil back-up that is low in emissions, which is why natural gas is essential when it comes to reaching our climate goals.

    Speaking of climate goals, what is your assessment of the recent climate agreement made at the COP21 in Paris?

    The climate agreement has to be considered a historical breakthrough. Never before has the UN been able to get everybody to commit to a common climate goal. This is a unique result. But we have to be aware that the actual work is only starting now, as the agreement does not define any mandatory actions. So the next step will be just as decisive, which is for the countries of the world to hand in binding plans for their factual contribution to limit global warming.

    You have opened a new office in Lagos at the end of last year. What are your further plans in Nigeria? Are you planning to open additional offices?

    As a next step, we are considering opening up a local service workshop. Our market-leading service is an essential element of the MAN brand experience and, of course, a strong selling point for any new business we create in Nigeria. And since we already have a strong local base, this is worth looking into.

    In 2014 you acquired a small engineering company in South Africa. Is M&A something you are also looking into for the Nigerian market?

    We are not on a shopping tour, but we follow a concept that we like to call “intelligent growth”. That means acquisitions are definitely part of our playbook, and Nigeria is no exception. However, it also means that we place very high demands on the commercial viability of any possible transaction. We look at M&A as a tool to help us open up new fields of technology, sales markets or supply chains. If that is the case, we may be interested. But we will always remain a lean and flexible player in the market. Our customer proximity and fast market response allow us to counteract the size difference to some of our competitors.

  • $9b Dangote refinery increases property prices in Lekki

    $9b Dangote refinery increases property prices in Lekki

    The property market in the  Lekki area of Lagos, Nigeria’s commercial nerve centre, is  experiencing an unprecedented boom, with rising demand pushing up property prices, The Nation has learnt.

    The development is said to be in anticipation of the coming on stream of the proposed $9 billion Dangote Refinery and Petrochemical Company located in the area, as well as other petrochemical companies scrambling to buy land in the area.

    Since Dangote Group awarded the project management consultancy, engineering and construction management of its 400,000 barrels per day (bpd) (20 million tonnes) oil refinery and 600,000 tonnes polypropylene plant, the Lekki corridor of Lagos and its environs have never been the same again. The area, which used to have a narrow single-lane road and notorious traffic congestion, is fast becoming a global business haven with a new dual carriageway with three lanes on both sides.

    On account of these, the multi-billion naira investment and the economic activities it is expected to spur in and around the Lekki Free Trade Zone (LFTZ) was one of the issues that came up at this year’sTokyo Annual Conference of International Bar Association in Tokyo, Japan from October 19 – 24. The plant, which would be one of the biggest in Africa after completion, generated so much interest among foreign investors at the conference. The consensus was that it would be a big investor attraction to Nigeria and Africa.

    This is why property prices in that area have soared by over 100 per cent from what it was late last year. Experts in real estate attribute this to the influx of people to Lekki. This made the value of property in the area very high, as prospective property owners scramble for residential apartments and office spaces.

  • Boom in Lekki-Epe property market

    Investors in property and real estate are flocking the Lekki-Epe corridor in anticipation of the opportunities from that area when the $9 billion Dangote Refinery and Petrochemical plant and other mega projects take off. The rush has triggered a sharp rise in the value of property on that axis, reports Assistant Editor Chikodi Okereocha

    The Lekki-Epe corridor of Lagos has become irresistible to property and real estate investors.

    Attracted by the upcoming $9 billion Dangote Refinery and Petrochemical plant, the West Africa gas pipeline in Ibeju-Lekki, the deep seaport, and the East-West road, which passes through Lekki, among others, local and foreign investors are literarily falling over themselves to invest in the area.

    The Nation learnt that since the Dangote Group awarded the project management consultancy, engineering and construction management for the 400,000 barrels per day (bpd) crude oil and 600,000 tonnes polypropylene plant, Lekki has become a beehive of construction.

    Apart from the refinery, located in the Lekki Free Trade Zone (LFTZ), a large portion of land in the area has been earmarked for the construction of an international airport. Also, the Lagos State Government, as part of the urban renewal programme of the administration of Governor Babatunde Fashola, has intensified its aggressive infrastructure development aimed at transforming Lagos into a mega city.

    For instance, the state government, and the Lekki Concession Company (LCC), constructed and expanded the Lekki–Epe Expressway, introduced the computerised tollgate, and also developed new alternative routes that made driving to and from Lekki less cumbersome. The Lekki link bridge between Lekki phase I and Ikoyi has also been opened, while the state government has proposed the construction of a fourth mainland bridge to link Lekki to Ikorodu.

    Essentially, the partnership between the state government and LCC intensified construction in the Lekki Peninsula and also culminated into a 30-year concession programme, which is gradually transforming the area into a highly modernised and functional living and working environment. Encouraged by these, LCC Chief Executive Officer, Opuiyo Oforiokuma, boasted that Lekki would be a world-class arena, both in terms of influx of businesses as well as in residential properties.

    The area alone boasts of over 50 estates, gated residential developments, and commercial complexes. Experts even say the number would double in the next few years as a result of on-going developments on the corridor. For investors, the opportunities expected to open up in the area when these projects come on stream are too tempting to be ignored.

    Already, property analysts and experts say the area looks good to play a major role as the new investment hub for real estate investors as Lagos gradually evolves to a mega city, a development, which perhaps, accounts for the sharp rise in the value of property in that axis.

    The Managing Partner, Adrant Partners, a Lagos-based firm of real estate and property consultancy, Mr. Ranti Adedeji, confirmed that because of the influx of local and foreign investors to the area, the value of property has skyrocketed. He said, for instance, that rent for a three-bedroom flat in Lekki Phase 1 has increased from N2.5 million to N6.5 million per year, while a duplex rose from N20 million to between N60 million and N75 million. Those willing to rent same apartment will have to part with between N8 million and N10 million per annum.

    Adedeji added that a block of flats now go for between N60 million and N75 million outright sale, whereas to rent same property, a prospective client will have to pay between N3.5 million and N4.5 million per year. The real estate expert said apart from residential apartments, offices of banks, insurance companies, big corporate organisations as well as automobile dealers, eateries, and shopping plazas dot the Lekki-Epe landscape.

    He said with the fast-paced developments in the area, more shopping plazas and commercial properties would soon spring up in the area.

    A property consultant, Gbenga Owoeye, attributed the upsurge in property development in the area to non-availability of land in Ikoyi and Victoria Island. This, he said, encouraged many prospective homeowners to look towards the Lekki–Epe area in the hope of taking advantage of the numerous business opportunities that would come on the back of the siting of the refinery and other major infrastructure projects there.

    He said investors in real estate are erecting fantastic structures comparable to those in Europe and other advanced countries. Lekki Phase I, Agungi, Chevron Drive, Lekki Peninsula Phase I, Wood Green Estate, Stillwaters Garden Estate and many more are replete with such exotic structures. For instance, Wood Green Estate located behind Chevron Drive boasts solar power as a reliable and eco-friendly alternative to the erratic electricity supply in the state. The estate also boasts Olympic size swimming pool, 24 hour closed circuit camera (CCTV) surveillance, maximum security and a state-of-the-art recreational park, among other facilities.

    The Ikota Villa, another estate within the area is also a mix of grandeur and style. The walls of the properties in the estate are screened, that is, sanded and polished to allow a smooth and straight finish, creating a sharper appearance and textured finish; while the ceilings are Plaster of Paris, PoP coated, providing a smooth finish and a white effect. In addition to this, the toilets and kitchens are of the highest standard with equipment imported from Britain.

    However, as attractive as this axis has suddenly become to investors, only the super-rich can afford the high cost, which experts say is because of the swampy nature of the area. Property developers spend huge resources on pilling and raft foundation before proper construction begins, a situation that forces them to transfer the cost to property buyers. But this has not discouraged investors most of who are hopeful of bountiful returns on investment.

  • LFTZ: $9b Dangote refinery to create thousands of jobs

    LFTZ: $9b Dangote refinery to create thousands of jobs

    Hope has risen for many youths as the proposed $9 billion Dangote Refinery will generate thousands of jobs, not only in Lagos, but throughout the country. TOBA AGBOOLA reports.

     

    • 8,000 engineers to be train

     

    THE Lagos State Governor Babatunde Raji Fashola (SAN), at the Lekki Free Trade Zone (LFTZ), Lagos introduced the Dangote Group of Companies President and the arrowhead of the proposed $9 billion Dangote Refinery and Petrochemical Company in the zone, Alhaji Aliko Dangote, to the host communities. This signaled the take-off of the multi-billion naira investment there.

    Hope has risen for many youths as the new investment is expected to generate thousands of jobs, not only in Lagos, but throughout the country.

    Dangote Group of Companies is set to train over 8,000 engineers. The project, when completed, would provide direct and indirect jobs for over 85,000 Nigerians.

    The plan is to make the country self-reliant in petrochemical and petroleum products, as well as make it an industrial giant through the Lekki Free Trade Zone (LFTZ). Another is to stop the importation of petroleum products by 2016.

    At the meeting, Fashala declared: “Lekki Free Trade Zone is beginning to take shape. The master plan is being realised; investors are trouping in. Tank farms and major refineries are springing up to service the demands of the country and make room for export. The refineries create a major selling point and release of the opportunities that lie ahead in this zone; create opportunities for the local people and the potential for Lagos and the Nigerian economy.”

    According to Dangote, Nigeria spends about $30 billion annually on importation of petroleum products.

    He said the project planned by his group would make Nigeria a net exporter of petroleum products, including diesel and aviation fuel, as well as poly-propylene and fertiliser. He said the project on completion would create massive employment opportunities.

    “Now, Nigeria is going to be taken out of the list of countries that import petroleum products. We will produce 20 million metric tonnes which is equivalent to what Nigeria consumes currently.

    “Without good government policies, there is no way the private sector can invest in Nigeria, because we are not Father Christmas. The policies have to be right,” he said.

    Speaking on the Project, the General Secretary, National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), Issa Aremu, said with a projected daily production output of 400,000 barrels, the same capacity of the four Nigerian government-owned refineries in Port Harcourt, Warri and Kaduna, operating at less than 30 per cent of installed capacities, the bold initiative by the Dangote Group is a giant stride at re-industrialising Nigeria in particular and Africa in general.

    His words: “African organised Labour and working people are excited about the bold corporate decision of the Dangote Group, the African conglomerate, and for blazing the trail in re-industrialising Africa through an unprecedented investment of $9 billion in oil refinery and petrochemical complex in Nigeria.

    “Millions of private sector workers organised in national and global unions in Africa identify with the investment, the singular patriotism and pan-Africanism of the President and Chief Executive Officer, Dangote Group of Industries, Alhaji Aliko Dangote.

    “Labour is excited that Dangote Group is changing the narrative of the continent from that of resource curse to resource beneficiation, value addition and mass employment through industrialisation and internal articulation of African economy. Industrialisation is for Nigeria if it must be part of the leading economies of the world, get millions of youth to work out of violence and crime and above all, out of poverty.

    “We commend Dangote for working the talk that a shift is needed; that natural resources of Africa should be for the welfare of all Africans, not the profits of a few, mostly foreign capitalists. This refinery will definitely decrease Nigeria’s scandalous unacceptable dependence on oil imports.

    The National Union of Petroleum and Natural Gas Workers, (NUPENG) in a statement declared delight over the proposed refinery/petro-chemical and fertiliser complex, saying the venture is bound to partly address the unemployment problem and also end the current massive importation of petroleum products into country. The workers have equally called on other private investors including the multinational oil companies to do the same.

    The statement said: “We all know how up to 18 firms that were granted licences to establish refineries under the Obasanjo administration, till now, have failed, refused or neglected to make use of the licence by establishing refineries in the country.

    “Dangote refinery may just be able to make the difference. When it starts operating in 2016, it is expected to become a major foreign exchange earner in the export of refined petroleum products in the country with additional thousands of jobs. For the over 170 million Nigerian people, who have continued to suffer for what they have in abundance, there is a beam of hope. Nigerians must be seen to be better off from the rich natural resources of the nation. We cannot continue to watch a few players, with foreign capitalist interest at the expense of national interests, continue business as usual. To be sure, it is not the violent agitations in the Niger Delta that is being advocated here, but the need for genuine economic participation in the oil and gas sector. Dangote Refinery has set the pace.

    “We need to develop efficient local capacity in such a leading sector of our national economy. To this end, the government must make the right policies to attract the right investors. The Petroleum Industry Bill (PIB) should also be passed into law to provide the enabling regulatory and legal framework towards ensuring competitiveness, transparency and the best international practices in the petroleum industry.

    “It is our hope that the Federal government will provide the enabling environment that will ensure the competitiveness of such private refineries in the country. Effective regulation of the oil and gas sector and provision of improved road infrastructure for efficient haulage and distribution across the country will enhance performance and delivery. And of course, the government must ensure that there is improved power supply in the country to enable the efficient operations of these refineries. We cannot afford to create more museum relics from plants working at 30 per cent capacity”.

    A top official of LFTZ who will not want his name in print, said the zone has been split into an oil and gas logistic park, light and heavy industrial and manufacturing section, media centre and urban residential section.

    The official added that for the zone to be developed quickly, as expected by the initiator, calls are being made for the development of a meaningful partnership, to build a modern international airport and sea –port, that will serve the zone, and become the aviation and maritime hub of the sub-region.

    It was also gathered that real estate companies would be given a role to play in the development of the zone. The LFTZ will showcase opportunities for private companies in the oil and gas manufacturing, food processing, hospitality and leisure sectors, banking and financial service sector would be expected to develop a 21st century financial centre at the zone.

  • At last, Dangote refinery

    At last, Dangote refinery

    BARRING unforeseen developments, a new refinery will be constructed in the country in the next three years. To be built by business mogul, Alhaji Aliko Dangote, the 400,000-barrels-a day capacity refinery will come on stream in late 2016. Dangote, who disclosed this to Reuters said it was a matter of time, the infrastructure we now have would no longer be to able to receive the amount of fuel the country imports.

    The refinery, when operational, will be a big relief in a country that is a major producer of crude oil, but still imports about 80 percent of its domestic fuel needs. It is also a relief in that when operational, Dangote would have succeeded in the petroleum downstream sector where many companies that had got licenses to establish refineries have failed years after.

    Nigeria presently has four refineries with a combined capacity of about 450,000 barrels per day. Unfortunately, they are all operating at far below capacity, due to decades of mismanagement and corruption which successive governments have not been able to address. Rather, they have chosen the option of importation to augment local supplies, to the detriment of the country’s economy.

    With fuel subsidy running into the trillion naira mark, importation of the commodity and subsequent subsidy payments on it have become an industry from which some people are feeding fat and are therefore unwilling to let go of the subsidy regime that has sustained them for decades.

    Yet, the present arrangement is unsustainable, especially as fuel subsidy is about the single biggest item on the country’s budget. Successive governments have realised this and their response, rather than address the problems of corruption in the existing refineries, and encouraging the establishment of new ones, has been to resort to incessant fuel price increases, the latest being the one of January last year which Nigerians fiercely resisted.

    The course of the fuel price increase protests of January 2012 has revealed a can of worms that the country has been grappling with since then. Even the government that promised to build Greenfield refineries at the time seems to have jettisoned the idea.

    It is against this sordid background that we welcome Dangote’s decision to set up the refinery with a capacity to refine more fuel than the country’s four aged refineries combined. In the first place, he has the financial muscle to do the business. He also has a track record as a great industrialist.

    As Dangote rightly noted, “In five years, when our population is over 200 million, we won’t have the infrastructure to receive the amount of fuel we use. It has to be done.” The refinery has to be built not only for this reason but also for the fact that a refinery of that size in the country will come with a lot of jobs for the teeming Nigerians out there who are roaming the streets in search of nonexistent jobs. Other things being equal, Nigeria and Nigerians have much to gain if Dangote goes ahead with his plan to build the refinery.

    Of course we cannot but note the fears in some quarters about Dangote becoming a monopolist, with its attendant consequences. These could be genuine, especially in our country where there is no Anti-Trust law to regulate the conduct and organisation of business corporations. But then, we should give Dangote the benefit of the doubt. This is much more so that he has said that a new refinery would still work profitably in the country even if the government maintained the subsidised fuel price, a thing that others have used as alibi to run away from establishing refineries here, preferring, instead, the lazy way out – importation.

    All said, the buck still stops at the government’s desk. It is its irresponsibility that led to Nigeria importing fuel all these years, despite the fact that she is a major producer of crude oil; so it is its responsibility to ensure that an Anti-Trust law is made in the country, not just for Dangote but to protect consumers generally from oligopolistic tendencies. The time is ripe for such legislation.