By Stephanie Odiase
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it is mobilising local capacities to embrace its open access initiative for a robust national strategic reserve.
The Regulator explained that local refining capacities and functioning pipeline network are needed to build a robust national strategic reserve, adding that the collapse of pipeline as a means of transporting refined petroleum products is largely responsible for the inefficiencies witnessed in the downstream sector.
The Authority Chief Executive, Engr. Farouk Ahmed, who disclosed this in Abuja recently, explained that when local refining improves, the excess product can be channeled into the strategic reserve.
He said: “We are helping the local refineries to refine more products so that the excess can be channeled into the national strategic reserve in addition to earning Nigeria foreign currency when they begin operations.
“The national strategic reserve will help the country revive facilities that are lying idle all over the country. For instance, the Nigerian National Petroleum Corporation Limited (NNPCL) has 22 storage facilities in the country. Most of these facilities are lying idle. The Authority can help revive all of that as part of the country’s strategic reserve. Through this plan, the Authority can offer the refineries an outlet for excess product,” Ahmed stated.
While noting the security challenge in the country, he stressed however, that a deliberate effort must be made to revamp the pipelines and equip them with modern technologies that can function even during wars and civil unrest as is obtainable in other countries.
“Experiences in Ukraine and Russia have shown that products can be transported during a war. Gas is still being supplied across Europe today even as war rages between Russia and Ukraine. Whatever is happening in Nigeria will not stop the movement of petroleum products through pipelines,” Ahmed said.
Pointing out that moving petroleum products through land breeds inefficiencies and leads to inadequate supply of products, Ahmed regretted that “The pipelines that are supposed to be the backbone of petroleum products’ distribution in the country have been left unattended to for many years,” adding that there cannot be an efficient distribution of products in the absence of pipelines.
On the fear of insecurity breaching pipelines, he said, “There are countries that are at war and yet they distribute petroleum products. As we speak Russia floats gas through Ukraine. That is happening because pipeline distribution is a business. The reason our pipelines are not working is because it is not a business. Therefore, the PIA provides for ‘open access’ to open up the pipeline aspect of the distribution channels.
“There are 27 depots that are connected to the Apapa jetty, the jetty has only one manifold. Each of the 27 depots key into the manifold when they are receiving product. This is functional because it is a business. The pipelines may not function optimally until they are run like as a business. That is what the Authority is aiming to do now. If someone is earning money from running pipelines and paying staff, he will care and the system will run efficiently, “Ahmed explained.
Ahmed noted further that through the open access initiative and pipeline network code, the pipelines can be rehabilitated; adding that the Authority has lowered entry barriers in the mid and downstream petroleum industry by creating more opportunities from pipeline to storage to marketing and distribution.