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How Duport’s Midstream Company will drive robust local Infrastructure.

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With the near-completion status of Nigeria’s first energy park  with a modular refinery, gas processing plant, CNG plant, storage terminal and power plant. CEO of Duport Midstream Company, Akintoye Akindele’s intervention and model will fill the market gaps Adedayo Adejobi writes.

 

Nigeria’s oil and gas sector appears to have under-performed given its potential to create a strong and diversified economic base. Since the discovery of oil in Oloibiri back in 1957 and despite presently being the eleventh-largest producer of crude oil in the world, Nigeria remains a major importer of refined products.

It now does appear that for many years, the major international exploration and production companies operating in Nigeria have demonstrated a huge preference to merely extract Nigeria’s hydrocarbons for export, with very little or no investment in local developmental capacity for refining and monetisation of Nigeria’s crude and gas.

Clearly, the pathway to building an enduring oil and gas sector involves deliberate government policies driving the development of robust local infrastructure like refineries, natural gas processing and pipeline construction and the encouragement of local participation in the oil and gas industry.

Even though, the Nigerian government may have taken note and successive administrations have responded with policies and strategic private sector-led partnerships known as Public-Private Partnerships (PPP’s) ,to channel the urgently needed investment into infrastructure and technology; the Nigerian Content Development and Monitoring Board (NCDMB) and the state-run oil corporation and regulators, the NNPC and DPR respectively, have actively supported and encouraged new players to make investments in the oil and gas sector.

To this end, technology, has also resulted in the emergence of modular refineries and power plants, which are now filling a crucial gap within the industry value chain. These interventions, actively supported by government policy, have succeeded in creating a new generation of bold and empowered entrepreneurs deploying cutting-edge technologies and international best practices to build the local industry and successfully unlock the multiple gains of integration within the oil and gas industry.

The industry has moved from a centralised architecture, based around large-scale hydro plants or refineries, to a distributed system where efficient modular refineries and power plants are driving increased local participation in the sector.

With sheer laser-focus and vision, in 2017, Akintoye conceptualised plans for the first of its kind modular refinery Duport Midstream Company Limited (DMCL), and an energy park. He is starting with a 2,500 barrel per day refinery, 40-million-scf gas processing, 5megawatts power, a data centre and storage facility.

Duport is fusing old industry of energy and new of technology to create a carbon-accretive, modern day business that will not not only impart environment positively, but also create jobs and boost confidence of local engineers. 100 students across engineering disciplines from each of the top six Nigerian universities will be employed.

Five years down the line, the Refinery, Compressed gas station, Power plant and Data centre will go live before the end June, next month. And Atlantic Refinery, another mind-blowing initiative, isn’t far behind.

 

With Nigeria’s refining landscape changing ,Duport Midstream proposes, the advent of emerging modular technology driven by the desire to provide an investor-friendly enabling environment in attracting capital and resources to the sector.

According to Akintoye, ‘the  industry regulator, the Department of Petroleum Resources, is doing a phenomenal job with policies and procedures aimed at deepening investment and interest in hydrocarbon extraction and processing.’’

Continuing, Akintoye enthused, ‘‘Duport Midstream and its parent company, Iman Africa Energy Group, have been emboldened by the business-friendly policies created by DPR and with their support and guidance, will continue to invest heavily in last-mile refining capacity with modular refinery projects in Edo State and Bayelsa State, both set for commissioning within the next month.’’

This is considered a major milestone given the speed and professionalism demonstrated by the team at Duport, in active partnership with the regulator, to deliver on these refineries. ‘‘Duport intends to continue to scale our operations upwards using modular technology that enables us to compete effectively and meet the needs of a vast underserved market.We have built a competitive edge as a low-cost producer as our integrated approach enables the use of shared infrastructure and derived economies of scale. Our overall strategy lies in the efficient deployment of low-cost integrated energy parks engaged in the production and sale of refined products and natural gas, as well as power generation and distribution.’’Akintoye Akindele stressed.

Duport Midstream , the first truly integrated energy park in Africa, nearing completion,is located in Egbokor, Edo State, Nigeria. The park will operate in phases, a 10,000-bpd modular refinery and crude distillation unit and 1,400-bpd naphtha stabiliser, a gas processing facility with a capacity of up to 60 mcf [1.7 mcm] per day and a compressed natural gas (CNG) plant with a capacity of 10 mcf [283,200 cubic metres] per day.

The park also includes an embedded power plant – presently 50 MW but scalable. The plant presently provides power to the site and plans to provide its excess power to the local communities bordering the Energy Park. It has also installed a Tier 4 Data Centre, the first of its kind in Africa, enabling it to provide data storage and communications facilities in a secure manner.

The Duport Energy Park obtains its feedstock crude and gas from Summit Oil OML 42 acreage, from where it constructed an extensive grid of feed pipelines to convey the crude and gas to its facilities from the field. Duport also constructed a 4.7-kilometre offtake pipeline flowing its processed gas into the NGC pipeline network at the tie-in point close to the park.

 

The Duport Energy Park also provides a 30,000-tonne refined product storage terminal with tanks for crude, naphtha, kerosene, AGO [automotive gas oil] and HFO [heavy fuel oil]. Duport also has a dedicated truck terminal from where its refined products are lifted and delivered to offtakers anywhere in the country.

In its short-term strategy for constructing energy parks in Nigeria, the parent  company, Iman Africa Energy Group, will build a minimum of five energy parks in the country over the next five years, strategically located in underserved economic hubs. The first two are expected to be commissioned next month and will deliver a minimum of an energy park annually from 2022.

’’To ensure uninterrupted flow of crude oil and natural gas to act as feedstock to our Energy Park, Duport Midstream,last year bid for, and was in May 2021, awarded joint ownership of a marginal field, Ekpat, which would ensure the company has enough products to feed its refineries and gas parks. We have built a strong and robust partnership with our original equipment manufacturers (OEMs) in Dubai, South Korea and the US. These are well respected international players in the oil and gas industry and have ensured we have received and built reliable and high-quality plants and refineries.’’

Akintoye Akindele has also given the assurances that, his firm is also deliberately encouraging the use of local content where possible,whilst  ensuring that technology transfer for artisanal and professional roles is assured.

 

In his words,he said ‘‘In partnership with the NCDMB, we have always pushed for an increase in local participation in our processes and operations pre- and post-construction. We are also partnering with our OEMs to build a manufacturing yard in Nigeria to support existing operations and position Nigeria to be a manufacturing and support base for these refineries and other oil and gas engineering equipment and parts.’’

 

With the such a novel idea, the next big question on the lip of the reader suffices, are there plans to replicate the energy park business model in other African markets?

On the affirmative, Duport Midstream and Iman Africa Energy Group have been engaged in talks with the governments of Ghana and Uganda, where their processing of land and licences to operate energy and gas parks is already advanced. Akintoye’s firm also has a small stake in a 10,000-bpd refinery for the Liberia and Sierra Leone markets and have begun talks on building a 30,000-bpd refinery in Guinea.

The demographics and business rationale lend credence to the need to provide these parks and products to what are huge and captive underserved markets where Duport’s industry know-how, funding capabilities and business network can be very useful in developing these international markets.

In summary, Akintoye Akindele intends to replicate the integrated and modular energy park model across key markets in Africa, providing a steady supply of refined petroleum products and natural gas, with plans to build a minimum of 10 more energy parks across Africa within the next five years.

 

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