The Nigerian Content Development and Monitoring Board (NCDMB), has sealed a $10m equity investment pact with Waltersmith Refining & Petrochemical Company Limited for the construction of a 5,000 barrels per day (b/d) modular refinery to be located at Ibigwe, Imo State.

The Executive Secretary of NCDMB, Engr. Simbi Wabote and the Director of Finance and Personnel Management, Mr. Isaac Yalah signed on behalf of the Board while the Chairman of Waltersmith, Mr. Abdulrasaq Isah and the Executive Vice-Chairman, Mr. Danjuma Sale, signed for the company at the weekend in Lagos.

With the $10 million investment, the Board’s stake is 30 percent of the project as provided for under the Shareholders Agreement and the Share Subscription Agreement.

The NCDMB’s Executive Secretary said the investment decision was in line with the Board’s vision ‘to be the catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors.’

In addition, he explained that the investment decision was taken to support government’s policy on modular refineries and meet the key objectives of the Petroleum Industry’s Seven Big Wins launched by President Mohammed Buhari in October 2016 and the Economic Recovery and Growth Program (EGRP).

On the extent of the Board’s involvement in the project, Wabote said that the Board had an exit strategy in place “to ensure that the refinery reverts back as a fully owned, privately run modular refinery as our role is clearly defined as a catalyst.”

He pointed out that the NCDMB in line with its mandate in the NOGICD Act 2010 and as part of the Nigerian Content 10-year strategic roadmap would intervene and fund projects and activities directed at increasing the nation’s content in the oil and gas industry, especially those that utilize locally-sourced inputs and have the potential of adding value and creating jobs.

According to him, some of the projects the Board can intervene in include, establishment of LPG depots, resuscitation of abandoned or establishment of new LPG cylinder manufacturing plants, partnerships on mini-petrochemical plants, among others.

He commended the management of Waltersmith for developing a bankable proposition, noting that “they sorted out the project feasibility, regulatory approvals, and other pertinent details before reaching out to the Board with the value they are bringing to the table and a clear definition of the support they seek.”

The NCDMB’s boss advised project sponsors and promoters of modular refineries seeking the Board’s support to study the checklist of requirements hosted on the Board’s website, projecting that at least 10 percent of Nigeria’s oil production should be refined using modular refineries.

In his comments, the Chairman of Waltersmith, Abdulrasaq Isah, explained that the modular refinery project was originally conceived to reduce the incessant vandalism of the company’s crude oil pipelines.

He pointed that feasibility studies later indicated that it could be a viable business because of the significant demand for refined petroleum products.

Isah confirmed that the refinery project would be sited close to the firm’s oil field at Ibigwe, Imo State and the refined products would be distributed to consumers within 40 kilometres radius of the plant.

He also expressed optimism that the project would support the government’s plan to substitute imported refined petroleum products and the strategy to use the establishment of modular refineries to address the menace of pipeline vandalism, illegal refining and other social challenges prevalent in the nation’s hydrocarbon resources industry.

The industrialist commended the Board’s management for supporting the project and assured that the company would do its best to ensure the success of the multi-million dollar project.

“This is landmark in the history of the NCDMB and we pride ourselves as the first beneficiary of this initiative.”