FEDERAL GOVERNMENT APPROVES WAIVER FOR PINNACLE OIL ON $250 MILLION SPM PROJECTS

  • Mar 11, 2014
The Federal Government has granted waiver to Pinnacle Oil and Gas Limited for the construction of a $250 million Single Point Mooring (SPM) facility at the Lekki Free Zone.
Single Point Mooring is an off-shore anchored loading buoy that serves as mooring point and interconnect to tankers loading or off-loading gas or fluid products. The facilities also provide low-cost and rapid import and export of crude oil and refined products, using a range of tankers up to very large crude carriers.
Minister of Transport, Idris Umar who stated this when he received the Managing Director of Pinnacle Oil & Gas Ltd, Peter Mbah who led the company’s technical partners and consultants on a courtesy to his office Abuja.
Umar observed that President Goodluck Jonathan before granting the waiver to the company, looked at the issue dispassionately adding that the facility when completed would transform the logistics supply of oil and gas within the Lekki Free Trade Zone.
Umar observed that the country stood to benefit tremendously from the project as it was a strategic project would help both in the import and export of petroleum products adding that tank farms could not be constructed within the Free Trade Zone without a facility of this nature.
The minister who urged the firm to demonstrate that the company had the technical and financial capacity to carry out the project, however advised the company to submit the list of all its technical partners to Nigerian Port Authority, analysing the company’s financial capability and technical know-how to carry out the project.
Umar gave the company the ministry’s full support to enable it carry out the project, which he described as beneficial to Nigerians and the entire country when fully on ground.
Speaking earlier, Pinnacle Managing Director, Peter Mbah said that the Single Buoy Mooring project would gulp as much as $250 million, adding that project marked a radical transformation in the logistics and supply chain of the Nigerian Oil and Gas downstream sector.
According to him, the facilities when completed would bring an end to the era of petroleum shortage and queue at the jetties as it would help marketers discharge their products with ease.
He pointed out that the facility had the capacity of 600,000 metric tones while about 100,000metric tones of petroleum products could be discharged within 48hours.
Mbah stated that the partnership with the China Petroleum Technology Development Corporation (CPTDC) and Lekki Free Zone Development Company (LFZDC) Limited would lead to the development of the Nigerian downstream sector as the free zone provided a more convenient alternative to loading of oil products.
He stated that the facilities would be served by about 11kilometres of subsea and shore pipeline. “In view of this, Pinnacle is presently in the process of engaging a technical partner for the purpose of obtaining the required Front End Engineering Design (FEED) for the project.
Mbah also noted that third party tank farm in the Lekki Free Trade Zone and environs would also benefit from the services to be provided by the facilities to avoid lightering and transshipment.
He stated that the Single Point Mooring facility at Lekki Free Zone would enable petroleum cargo vessels to anchor and discharge products through the network of undersea and onshore pipelines to respective tank farms adding that the under the MOU executed by Lekki Free Trade Zone Company Limited, Pinnacle Oil and Gas Limited and China Petroleum Technology Development Corporation.
He said: “The Lekki Free Zone SPM couldn’t have come at a better time than now that government is withdrawing subsidy on petrol. Considering that factors which impact on the product price like demurrage and littering of cargo-using small vessels to take products from bigger vessels that cannot dock at the jetty due to the shallow draught, would be eliminated therefore reducing the landed cost of petroleum products quite considerably.
Basically, the proposed mooring facilities would eliminate any need for lightering or other trans-shipment operations such are the norm in the Nigerian downstream industry today and would also negate any need for investment in the construction of a shore side jetty.”
“Furthermore, the mooring facilities will enable petroleum cargo vessels of various capacities to anchor and discharge products with minimal vessel congestion as compared to the current situation on the Apapa- Kirikiri axis,” he added.
Mbah said that the impetus to develop the project stemmed from the fact that Lekki Free Trade Zone would make it possible and easy to import and export products and service the entire West African market.
He said that the undertaking of the $250 million SPM demonstrated the technical knowledge and financial strengths of the indigenous company.
According to him, the partnership with the CPTDC and LFZDC Limited would lead to the development of the Nigerian downstream sector as the free zone provided a more convenient alternative to loading of oil products.
He added that the SPM facility at Lekki Free Zone would enable petroleum cargo vessels to anchor and discharge products via the network of undersea and onshore pipelines to respective tank farms.

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