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Why Not Build Refineries Before Deregulation?

when a country like Venezuela has 19 state run refineries. we don't have any and the govt wants to deregulate?

how much does it take to construct a refinery?

is there a conspiracy by our rulers to keep importing petrol etc and not build a refinery?

why cant all the Niger delta states each build a refinery to generate revenue and employment for their states?

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12 answers

Why not start this wonderful experiment with the ones we have right now?

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@DatNiggaAk

I'm certain you watch AIT and Read PM news where all they say is "Government is bad".

There are refineries. They are not working. Why should the federal government build more of those just because they want to deregulate? Why didn't y'all ask the government not to deregulate the Telecoms sector till 2020 when they must have set up the perfect telecoms company aside from NITEL. We would have all died by now because as we speak, NITEL lines have gone from about 500,000 in 2003 to less than 30,000 today.

All the 6,000 MW we're talking about in December will remain a fantasy as long as government wants to keep participating in Electricity production. The job of the Federal Government is to govern a federation and not to be buying and selling or producing goods and services.

Everything should be deregulated but why we won't support that is because we don't know that price fixing and regulation of price, demand and supply, fixing of ceilings and floors are all undemocratic.

Nigerians must change their attitudes and mindset before anything good can come out of this country we need to change and we need to realise that when we talk about the government not doing this, and the government not doing that, we really are talking about ourselves.

Thanks.

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http://allafrica.com/stories/200910280699.html

Pipelines and Products Marketing Company (PPMC) of the Nigerian National Petroleum Corporation (NNPC) has been working tirelessly to fix the sabotaged Chanomi Creek pipleline wich connects crude oil to both the Warri and Kaduna refineries.

Two refineries in Port Harcourt are currently in operation with a capacity of around 210,000 barrels per day, according to NNPC.

Warri Refinery has installed capacity of 125,000 bpd while Kaduna Refinery has a capacity of 110,000 bpd. Both refineries are fed by Chanomi Creek crude oil pipeline from Escravos oil fields.

Nigeria's refineries have a total nameplate capacity of 445,000 bpd but have never operated at full capacity. Even if they did, they would produce only 18 million litres of petrol out of estimated average peak daily demand of 32 million litres.

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=3203:nigerian-refineries-history-problems-and-possible-solutions-1&catid=67:oil&Itemid=307

Nigerian Refineries: History, problems and possible solutions (1)

"Two oil marketing companies in Nigeria , Shell and British Petroleum, BP, formed a 50/50 joint venture refining company in Nigeria , the Nigerian Petroleum Refining (NPRC) in 1960. 

The NPRC built a 38,000b/d petroleum refinery at Alesa-Eleme, near Port Harcourt to refine local crude oil into five petroleum fuel products. Construction of the refinery commenced in 1963 and production started two years later, in 1965."

"The refinery was de-bottlenecked in 1973, in order to increase its crude oil processing capacity from 38,000b/d to 60,000b/d. The domestic demand for petroleum products which steadily increased was satisfied by the NPRC refinery for about 8 to 10 years."

"The acute and prolonged nationwide shortage of refinery products, especially petrol, started between 1973 and 1974. These shortages resulted from several factors but were generally due to the sudden sharp increases in demand. The main reasons for the high demand were attributed to a considerable increase in the economic activities following the end of the Nigerian Civil war." 

"Purchase of all types of vehicles, especially ‘tokunbo’ cars, electrical and electronic household goods sky-rocketed. The domestic demand for petrol more than doubled. Electrical power consumption also sharply increased nationwide.

Feasibility studies were first undertaken by BEICIP, an international oil and gas consulting firm from Paris , in 1974 for the Federal Government. The objectives were to establish the demand and consumption patterns of petroleum products. These studies were also used to determine the size of a new refinery to be constructed. Following a tendering exercise involving international engineering contractors, a contract was awarded to Snamprogetti Spa of Milan , Italy , in 1975. The contract was for the design, procurement and construction of a new grassroots petroleum refinery in Warri. The design capacity of the refinery was 100,000 b/d, and the lump sum cost was $478 million, for project duration of 30 months."

"A second new refinery was planned for the production of lubricating oil products, waxes and asphalt (for the road projects). This refinery which was located in Kaduna consisted of two refining streams, (50,000 b/d fuels units) and (50,000 b/d lubes, waxes Asphalt plants). The contract for the construction of the Kaduna Refinery was awarded in 1976 to Chiyoda Engineering and Construction Company of Japan, at the cost $525 million, for a project completion period of 36 months. The refinery was completed on schedule and was commissioned in later 1979. The existing products pipeline linking Warri Refinery to Kaduna was converted to pump crude oils for supply to the new Kaduna Refinery."

"By 1980, with the old Port Harcourt , Warri and Kaduna refineries in operation, there was still an appreciable level of importation of petroleum products to augment domestic production from the three refineries. A review of the old study was conducted to update the demand and the pattern of consumption to cover the next period of 10 years.

This was also to determine the optimum size and location for an export oriented refinery, which would also supply the domestic market as required. The several options considered included, new refineries and/or expansion of existing plants. The Federal Government decided to expand the capacities of the fuels units in the existing refineries at Warri and Kaduna by “de-bottlenecking.”

The de-bottlenecking route was quicker by capacity increases were moderate. The de-bottlenecking projects were completed in 1985. The new capacities at Warri Refinery and Kaduna Refinery became 125,000b/d and 110,000b/d respectively. In addition, a new grassroots refinery with a capacity of 150,000 b/d would be constructed adjacent to the existing refinery at Port Harcourt . The total additional refining capacity added from the result of the new study became 185, 000 b/d. this would bring the total refining capacity in Nigeria on completion of the projects in 1989 to 445,000b/d, which is still the current total installed refining capacity in Nigeria.

The new Port Harcourt refinery with a capacity of 150,000b/d was designed to include facilities to export products in excess of domestic demand. The contract for the design and construction was awarded to a consortium of JGC Corporation/Marubeni Corporation both of Japan and Spibatignolles of France in October 1985 at a total cost equivalent of US$850 million. The construction was completed and the refinery was successfully commissioned in October 1989."

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build the refineries first then start a ppp with it.

the management team can be from operators of the downstream sector.

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Is Nigeria Venezuela? Do we have the same value system, civil service culture and sense of patriotism?

Are you suggesting another four dead state refineries to add to the four dead state refineries littered around the country?

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Please also see our thread on deregulation, it will put you in a better frame of mond to discuss the topic. My many thanks go[b][/b] to

STRATEGIC UNION OF PROFESSIONALS FOR THE ADVANCEMENT OF NIGERIA (SUPA), Emyah , Twy  and dapsee

http://www.nairaland.com/nigeria?topic=347034.msg4860286#msg4860286

Thank you

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they won't build refineries, they would still import because it is brings in more profit for them with less capital invested

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nnpc shamelessly advertises on tv supporting deregulation by saying one of the benefits is the construction of larger storage facilities for imported petroleum, WTF!!

IF Venezuela can sustain 19 state run refineries, WTF are you talking about that, thats whats killing us?

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Nature abhor a vacuum, the same analogy applies - the deregulation process will force the domestication of petroleum production instead of the current trend to import because the framework for deregulation does not involve government as a player. The private sector participants will have to meet the supply end of the demand domestically

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Federal gov' need to stay out of the refinery business, that' what's killing us.

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If refineries r built then those big shots importing fuel to our very own detriment will no longer make money

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Why not fix the erratic power problem then every other thing will fall in place.

Isn't this easier than some refinery that will require electricity?

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