A Nigerian oil company, Drake Oil Limited, has signed a Memorandum of Understanding (MoU) with a South Korean firm, SK Engineering and Construction Group, for investment of $5.5 billion in Nigeria’s oil, gas and power sector.
The agreement, sealed by both firms in Abuja on Tuesday, will involved the building of a Liquefied Petroleum Gas (LPG) plant with a capacity of about 30,000 metric tonnes per day in Oguta, Imo state, within the next six to nine months.
Drake had earlier signed an agreement to this effect with the Federal Government via the Ministry of Petroleum Resources.
Other agreements which are equally expected to be activated for implementation by the MoU include projects on gas flaring control, soil and water remediation in the Niger Delta, power generation and distribution as well as a definitive gas processing plant, otherwise known as gas-to-liquid project which will be sited in Rivers state.
The concessionary agreements had been entered into by the federal government and Drake Oil at various times in the recent past, but negotiations with the company’s foreign technical partner had stalled their immediate take-off.
Accordingly, the agreement for the construction of an LPG and power plants was signed by the firm and Federal Government under a public-private- partnership concessionary term of Build, Operate and Own (BOO).
Commenting on the development shortly after the official exchange of the contract documents, the Executive Chairman of Drake Oil Limited, Dr. Sam Dede, said the LPG plant was sited in Oguta because of the availability of feedstockin the state. He explained that the signing of the MoU signalled an actual commencement of these projects which are expected to be completed within the various time lines as specified in the terms of agreement.
He said the design of the gas-to-liquid project is envisaged to be bigger than any refinery in Nigeria and will take between three and four years to be completed and commissioned for operation, while the LPG plant on which work on it is equally expected to commence immediately will take a maximum duration of one year to be completed.