Nigeria to record N43bn annual savings as OVH Energy’s Lagos Midstream Jetty comes on stream
Nigeria, Africa’s largest economy by gross domestic product, and an avid importer of petroleum products is expected to record N43 billion in annual savings from activities associated with product importation, storage and offloading following with the coming on stream of a midstream jetty facility Tuesday.
Company executives at ASPM Limited, a subsidiary of OVH Energy Limited, an Oando Plc associate company, Tuesday spoke of what they see as a “groundbreaking milestone” with the launch in Lagos of the company’s Lagos Midstream Jetty (LMJ) located at Lagos Apapa Harbour.
The Lagos Midstream Jetty is coming on stream as West Africa’s first privately owned midstream jetty and was conceived by parent company, Oando Plc, senior company executives told www.businessamlive.com to increase the delivery capacity and offloading efficiency of petroleum products into marketers’ storage facilities in Apapa.
In a briefing note made available to Businessamlive, the company said The Lagos Midstream Jetty is expected to alleviate the perennial infrastructural hiccups experienced in Apapa, eliminating the lightering and demurrage charges currently being incurred by petroleum marketers by N8.3 billion ($23m) and N9.8 billion ($27m) respectively. Additionally, the Jetty will reduce discharge time from 21 to three days, increasing product availability.
The jetty is described as having a draft of 13.5m, Length Overall (LOA) of 210m and a capacity to receive 45,000 DWT vessels (deadweight tonne), and is expected to discharge at up to 800m3 (cubic meters) of petroleum products per hour. With 24 hours a day operating schedule, it is programmed to supply products into storage facilities situated within the Apapa axis, via a three kilometers submarine pipeline network linked directly with up to 200,000 metric tonnes of storage facilities belonging to major and independent marketers in Nigeria.
The jetty, which is configured to receive all white products including petrol, diesel and kerosene, consists of a simple horizontal platform, five berthing dolphins, and four mooring points.
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In comparison to available jetties, the Lagos Midstream Jetty has the capacity to receive larger vessels of up to 45,000 DWT in one lot thus reducing the current necessity of bringing in smaller volumes of petroleum products in several batches. This will result in significant cost savings on lightering and generate economies of scale advantages for marketers.
Commenting at the launch event, Wale Tinubu, chairman of OVH Energy said: “The Lagos Midstream Jetty was conceived as an innovative industry solution to the perennial challenges marketers faced in the importation of petroleum products. Over the past 30 years, marketers have spent approximately N1.6 trillion ($4.5 billion) on lightering, with 90 percent of this spend flowing out of the country. Today we have delivered a first-class piece of engineering that meets global standards, is the first of its kind in sub-Saharan Africa and will be of invaluable benefit to the industry and nation at large. I must thank our regulators, bankers and contractors who believed in us from the start. It is a proud moment for Oando PLC who conceived the idea and OVH who have taken up this mantle. From conception to realisation, the idea of the Lagos Midstream Jetty is now a reality and is indeed another infrastructural success for us, our nation and the continent.’’
Deji Osikoya, the general manager of ASPM Limited, a subsidiary of OVH Energy, described the Lagos Midstream Jetty as an innovative infrastructure investment designed to radically transform the efficiency of Nigeria’s downstream landscape and boost Nigerian’s petroleum downstream economics.
“We expect the Jetty to become an extremely valuable and viable portfolio especially for marketers, reducing delays caused by infrastructural limitations in Lagos, thus improving marketers’ service delivery and profitability and reducing the financial drain on the nation’s resources,” Osikoya noted.
The Jetty is equipped with a gangway tower to facilitate vessel discharge operations and an on-shore control station at Alapata, Apapa which serves as the central control center for its off-shore and on-shore operational activities fully equipped with an automated process control system.
“The Lagos Midstream Jetty (LMJ) is fully operational, having berthed 10 vessels and discharged products totaling 255,000 metric tonnes of cargo demonstrating its potential as a functionally efficient and safe facility. With a monthly volume capacity of 240,000metric tonnes, or 240,000,000 litres, the Lagos Midstream Jetty is set to substantially boost supply of petroleum product into Nigeria, and contribute an estimated N13.1 billion ($36 million)
cost reduction in product imports and associated transactions,” Osikoya further explained.