WalterSmith, AFC, sign $35m modular refinery deal
A $35 million debt facilities agreement has been executed between Walter Smith Refinery and Petrochemical company and Africa Finance
The total cost of the refinery is about $48 million. While AFC is providing $35 million of the money the promoters of the project which is being sited Ibigwe field in Imo State are to make available the balance.
According to Abdulrasaq Isa, chairman of the WalterSmith Petroman Oil Limited the facility would be scaled up to 30,000 barrels per day after the first phase of the project must have been completed.
Automotive Gas Oil (AGO), House Hold kerosene, Naphata would be the major products that would produced from the 5,000 barrels per day refinery.
The Walter Smith boss said that petrol, Aviation fuel and Liquefied Petroleum Gas (LPG) would be produced after the plant would have been scaled up to 30,000 bpd.
In May this year, the company executed the engineering, procurement and construction agreement with VELEM, a consortium of two companies, VFUELS based in the United States and Lambert Electromec based in Nigeria. On June 29 2018, it also signed Shareholders agreement with the Nigerian Content Development and Monitoring Board (NCDMB ) for an equity investment of $10 million in to the project.
“The investment by Walter Smith, AFC and NCDMB into the refinery project is clearly strategic and cannot be coming at a better time. On our part, we have bee plaqued by frequent unrest in the Niger Delta area, which has hampered our production for a cumulative period of 747 days. This equivalent to two years out of the 10 years of the company’s existence,” Abdulrasaq Isa said.
He said the investment in the refinery became imperative to enable continuous production from its upstream business all year round without interruption arising from vandalisation of crude oil.
In addition, WalterSmith will be able to contribute about 271 million litres of refined products annually to the Nigeria economy, serve as an import substitution for meeting domestic demand for petrol products, create both direct and direct employment opportunities as well as reduce the amount of foreign exchange demand on the country’s treasury needed to import these products.