The choice to link a network of pipelines of oil from Niger Republic to Kaduna Refinery was not thought of until recently, when renewed attacks on the nation’s crude oil infrastructure in the Niger Delta rendered the Kaduna refinery and other refineries in the country idle for most part of the year.
For a few specialists, it was savvy for the Federal Government to use Kaduna refinery that is equipped for refining both local and international crude.
Disclosing the plans to commence the construction of pipeline from Niger Republic to Kaduna recently, the Group Managing Director of NNPC, Dr. Maikanti Baru said the government would build 1,000 kilometres of pipeline from Agadam, Niger Republic, to supply crude oil to Kaduna refinery.
Baru said high-level contacts have been made with Niger Republic on the possibility of importing crude from the country.
While some experts and stakeholders believe that the decision would serve general interest, others are of the opinion that the new move and government’s intense exploration exercise in the Northern region are all geared towards reducing over-dependence on crude oil supplies from the Niger Delta.
Some believe there is need to support the government on this new move as crude oil supply pipelines to both Warri and Port Harcourt refineries are being breached, as much as, the Trans-Niger trunk line that supplies the Kaduna Plant from Escravos.
Speaking on the possible cost implication of going to Niger, Head of Energy Research at Eco Bank, Dolapo Oni says an estimated $1b would be required to construct the proposed 1,000-kilometre crude oil pipeline from Agadam in Niger Republic to Nigeria’s Kaduna Refinery and Petrochemical Company.
According to him, the standard cost for laying a pipeline is $1m per kilometre, while distance and terrain are key determinants in cost.
Nigeria’s crude production, which was 2.1 million barrels per day at the start of 2016, fell by half following a series of attacks, since January, by Niger Delta militants.
Speaking with The Guardian on the issue, Chairman of Petroleum Technology Association of Nigeria (PETAN), Bank Anthony Okoroafor, who applauded the new arrangement, says it is a bankable project, which can pay for itself. “I do not see any problem in its funding,” he added.
According to him, the Kaduna refinery can produce an average of about 1.6 million litres of PMS daily once in full operation, which is less than five per cent of Nigeria’s daily consumption.
“The insecurity of assets is a major source of concern for government, the oil industry and Nigeria as a whole. It is possible that government’s efforts to solve the protracted crisis in the Niger Delta has not been fully communicated to the people. I still believe that what we need is a plan for the rapid development of the Niger Delta area.
“Those who fail to learn from history are condemned to repeat it. We must start with tangible developments that can create sustainable employments, entrepreneurs and ensure 24 hours power supply. By creating opportunities for many, businesses can thrive, the security of lives and property can improve and we will not be discussing this bilateral agreement with neighbouring countries to import crude oil. All this will take time but the result will be sustainable and a win-win formula for both the Niger Delta region and the government. We should not fool ourselves that it will be easy, but it will stabilize the goose that lays the golden egg – the Niger Delta region and our oil industry at large. Also, government must continue to engage constructively and sincerely with Niger Delta no matter the difficulties. This problem took long time to manifest and cannot be solved easily. It will take time but will be solved.”