A Review of the Nigerian Energy Industry

PENGASSAN wants govt to adopt NLNG model on refineries

09 April 2012, Sweetcrude, LAGOS – The Petroleum and Natural Gas Senior Staff of Nigeria (PENGASSAN) has urged the federal government to drop the idea of selling the nation’s four refineries and adopt the Nigerian Liquefied Natural Gas (NLNG) model in managing the refineries.

Babatunde Ogun, president of the union, who disclosed this at the weekend, said it was only the NLNG model that could protect the national interest and make the refineries operate at their full capacities.

In the NLNG model, according to him, the Nigerian government, through the Nigerian National Petroleum Corporation owns, 49 per cent of the equity shares, while the remaining 51 per cent is owned by Shell Gas BV, Total LNG Limited and Eni International in different proportions.

Ogun said the model will free the operations of the refineries from all encumbrances caused by bureaucracy and official bottlenecks that hinder them from performing at their optimal capacities.

He stated that the major problem bedevilling the four refineries is lack of adequate autonomy for their boards.

He said the present situation where the managing director/chief executive of the refineries have an approval limit that cannot even replace a nut in the plant let alone carry out a Turn Around Maintenance (TAM) is detrimental to the efficient operations of the refineries.

He said: “There are many limiting factors that cannot allow our refineries to function at optimal capacities and as a major stakeholder we are also worried about this. We canvass that for the downstream sector to be active and for the anomalies in the functioning of the refineries to be corrected, what we need is liberalization but not privatization.

“This is what the government did with the telecommunications sector. If the market is liberalized, the private investor will be able to come in with investments and establish refineries, while the existing refineries can operate side by side.

“In Nigeria, we are all living witnesses to the fate that befell companies that have been privatized. Where are they today? Where is NITEL, Ajaokuta Steel Company Limited, Nigeria Iron Ore Mining Company (NIOMCO) and a host of others?”

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