Page 40 - Nigeriaone mag 3 edition en

Modular refinery as a panacea to illegal refinery

Modular refineries can be regarded as mini refineries with a smaller quantified output level, when compared to
larger refineries with the intended capacity to produce a diverse range of finished petroleum products, as well
as increased level of output. The main characteristics of these mini refineries is their movability,
transportability, portability, convenience, and the ease of building them.
The attractiveness of modular refineries for domestic and foreign investors is the appeal of ease of building
them up and pulling them down after use. More importantly, for small scale investors who do not have massive
funds available to invest in the downstream sector, the modular refinery appears to be a sensible alternative.
The environmental implications of operating modular refineries tends to be less harmful than conventional
refineries as it creates less pollution and thus results in less environmental degradation than large scale
refineries.

Finally, modular refineries tend to have much lower
logistics costs when compared to larger refineries.
The cost of transporting finished products is
smaller, compared to conventional refineries which
need larger storage and transportation costs. As a
result of the lower output of modular refineries, the
refined petroleum products should not need long
term storage facilities to keep them, as they can
easily distribute it to pipeline outlets or put them in
trucks specifically designed to carry petroleum
products.
Modular refineries have been proposed as a solution
to the problem of oil theft and pipeline vandalism in
the Niger Delta region. The problem of oil theft has
reached an alarming dimension as revelation from
Nigerian National Petroleum Company (NNPC) that
Nigeria loses an estimated 120,000 to 150,000 barrels
of crude oil on a daily basis.
The central objective of setting up modular
refineries in the Niger Delta region is to reduce
pressure on foreign exchange spent on the
importation of refined petroleum products, improve
the availability of locally distributed petroleum
products, mitigate youth restiveness through
promoting socio-economic development in the Niger
Delta du Niger, Nigeria
Delta region, and eliminate environmental
pollution/environmental degradation that results development. As it was regarded as the extension of
from illegal refining activities, pipeline vandalism an olive branch to artisanal refinery and illegal
and crude oil theft. refinery operators in the region. However, the
Thus far, agitators for modular refineries are artisanal refinery operators in the Niger Delta
dissatisfied with the slow pace of progress made by region were disappointed as they had hoped for the
the government on crafting and designing of establishment of modular refineries, instead
specific policy initiative modular refining. While the government policy seems geared towards giving
announcement of the policy on modular refineries licenses of modular refineries to artisanal operators
by the vice president was seen as a welcome in the region.

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