An attractive environment for modular plants

Nigeria

Souheil Abboud, managing director of VFuels, talks to The Energy Year about the appropriateness of modular refineries to the Nigerian context and the company’s recent and future projects in the modular refinery and gas spheres. VFuels is a Houston-headquartered full-service oil and gas engineering, design and fabrication company.

In what ways is asset decentralisation appropriate to the character of the Nigerian market?
Nigeria provides the perfect environment for decentralising assets, especially when it comes to power or refining on a small to medium scale. Modular assets help overcome the challenges typical for developing economies in terms of infrastructure and logistics. This model offers countless advantages in terms of capex, opex, schedule and competitiveness. Modular refineries can be completed in under two years and once built, they are a lot simpler to operate and maintain compared to conventional refineries. Modular designs require less space and are easier to construct on site.
Today, a modular refinery in a particular location will be able to cover the needs of a local community and surrounding economies more cheaply than a centralised one simply because of logistical difficulties and their associated costs. Modular refineries, due to their efficiency and advantages, will provide continuity in developing the Nigerian economy via transfer of technology, job/wealth creation, energy security and increasing foreign direct investments. Decentralisation is thus the way forward and corresponds to the realities of the country.
Laudable efforts in encouraging this decentralised trend are being made by DPR [Department of Petroleum Resources], which is granting licences and permits through a transparent process. The NCDMB [National Content Development and Monitoring Board] is also a crucial body, acting as a financial driver of the various modular refineries being built across the country. Together, they are fostering the right environment for the development of modular refineries and modular gas plants – an environment which is attractive for investors.

What were the keys to success in the completion of the Waltersmith refinery?
The 5,000-bpd Waltersmith refinery project, commissioned in late 2020, was a true milestone for the country. We were in charge of designing, engineering and fabricating the process units – the inside battery limit [ISBL].
The FAT [factory acceptance test] was done in our fabrication yard in the US and what we did was to dismantle everything, ship it to Nigeria and reassemble the whole ISBL onsite. We take local content seriously and for this reason we try to employ a local workforce to carry out the assembly in-country.
The outside battery limit was constructed by our partner Lambert Electromec, which was in charge of the infrastructure, electro-mechanical, civil works, fencing, lighting, etc. We engaged the local community in this process, in our efforts to ensure the use of local products and a local workforce.
The Waltersmith project worked out smoothly, despite the unprecedented “hiccup” of the pandemic, which caused slight delays. Lambert had a lot of people on the ground, which was essential to keep the ball rolling during Covid-19, and we all followed the necessary health and safety measures. We encountered different issues during the rainy season, as the road was washed away at a time when we were about to move the modules from port to site. Challenges of this nature were overcome due to our local understanding, solid partners and service providers. Our experience, added to fluid synergies with Waltersmith, Lambert, DPR and the NCDMB, as well as with the local community, made this project a success.

What further involvement will you have in modular refinery projects in Nigeria?
The Waltersmith refinery is designed for future expansions, of which the next phases are in progress. We are now working with Waltersmith on the pre-development scope. VFuels has a good relationship with the US Exim Bank and other financial institutions of a similar calibre, which means that we can provide financial instruments and capacity to fund modular refinery and gas plant projects in Africa and Nigeria specifically. In any case, Phase 1 involved a simple topping plant producing naphtha, kerosene, diesel and HFO [heavy fuel oil], while the next phases will involve gasoline, LPG and jet fuel.
Plans to develop the Eko Petrochemical Refinery are also ongoing. We have been involved in this project since the pre-development stage and we managed to secure a USD 1-million grant from the USTDA [US Trade and Development Agency] to do the detailed design and engineering work. Things are moving forward, with the initial phase targeting 20,000 bpd. We have a healthy pipeline of projects moving forwards in Nigeria.

How keen is VFuels to explore the array of options opening up in the gas space?
Gas is definitely the present and future. Nigeria still has massive potential for crude refining, but this doesn’t mean that gas is not an attractive sector. The main challenge with gas projects tends to be that they are location-specific. Gas relies a lot on major infrastructure and needs to have good in-country penetration to reach the consumers. These factors have contributed to the slow growth of gas consumption, namely of natural gas, CNG and LPG. Pipelines are now being built and the country is bullish on further supporting the gas sector.
As a company, we are interested in the prospects of CNG and LPG for power, autogas and industrial use. We are proactively looking for modular gas projects, whether based on associated or non-associated gas. Furthermore, gas tends to be easier to fund for environmental reasons. We believe that the gas sector will continue to grow as the gas infrastructure continues to develop and demand increases.

In what other modular refinery projects are you involved in sub-Saharan Africa?
We are currently commissioning our 10,000-bpd refinery project with Conex Petroleum Group in Monrovia, Liberia. Our EPC partners, Lutech Engineering, have done a great job in catching up on time lost because of the pandemic. Commissioning is due in August/September 2021. We are also present in Equatorial Guinea, having completed the engineering works for a modular refinery.
Another major project we are working on is the Cabinda Refinery in Angola. Our scope includes the design, engineering, fabrication and installation of the process units. The Cabinda Refinery is slated to process 30,000 bpd as an initial stage. The engineering, procurement and fabrication work is ongoing in our Houston facility.

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