BUA Group Partners France’s Axens For New Refinery Project

FUNSHO AROGUNDADE

BUA Group, one of Nigeria’s leading industrial conglomerates, has signed France’s largest hydrocarbons group, Axens to provide her key refinery technologies for its multibillion-dollar 200,000 barrels per day (BPD) refinery and petrochemical plant in Nigeria.

This was unveiled Tuesday September 1 in Paris, France.

According to report, the French giant was given the contract to license key technologies to the BUA Group’s refinery project to be located in Nigeria’s oil-producing state of Akwa Ibom State.

The contract was signed in Paris between BUA Group Chairman Abdulsamad Rabiu, and the CEO of Axens, Jean Sentenac, in a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.

The new refinery project sets up a direct competition with Dangote Refinery set to become operational by early 2021.

The new project, expected to be operational in 2024, will go head-to-head with Nigeria’s other large scale refinery project, being built by the Dangote Group.

The Department of Petroleum Resources disclosed recently that Nigeria expects to become a net exporter of fuel and other petroleum products within the next 2 years as the various ongoing refinery projects come on stream.

However, by comparison, the Dangote Group project will produce 600,000 bpd while BUA Refinery will produce 200,000 barrels per day (bpd).

For Rabiu, speaking at the signing ceremony in Paris, the economics of the project area ‘no-brainer’ as Nigeria imports 90 per cent of its petroleum products.

“We spend 35 per cent of our foreign exchange on importing petroleum products,” Rabiu said.

He stated that there is space for another project, despite the growing international glut of refinery projects, the tapering of transport fuel use globally, and the strong local competition.

Partly because of the projection for fuel use in Nigeria itself, the country today uses around 500,000 to 550,000 barrels a day of petrol.

And partly because of demand in the South south and South East regions of the country, the project is sited on the waterfront in Akwa Ibom State.

“We will have the marine infrastructure for easy export. And the external market for polypropylene [the other major product from the refinery] is very strong,” said Rabiu.

The refinery will be built using an undisclosed mix of debt and equity, with several development and commercial banks in negotiations with BUA Group.

The bidding process was managed by energy consultants, KBR, which will also be handling subsequent rounds for the engineering and construction phase.

Subsequent bidding rounds, which will include construction and engineering contracts, are already underway.

It was gathered that Axens headed off strong competition from the United States company, Honeywell UOP, which got through to the final round, according to sources close to the bid.

“President Macron has given special determination and support to this project,” Rabiu told The Africa Report, who has been made Chairman of the Macron-initiated Franco-Nigerian Investors Club.

Sentenac, Axens CEO said the technologies that Axens is licensing will give Lagos the chance to breathe easier.

“We are the world leader in the Euro 5 fuel standard; this has already reduced car pollution in Europe by a factor of 5 or 6, and it also allows Nigeria to start using the latest generation of fuel efficient engines, the first step towards fighting global warming.”

The plant also has the ability to refine biofuels.

Rabiu believes his investment in sustainability — “It was not cheap!” — will pay off in the long run, as new fuel standards continue to evolve along with the climate crisis.

“It is in the DNA of BUA Group; look at our cement plants, the most sustainable in Nigeria, same with our sugar plants. This is the hard part, we cannot get this wrong”, said Rabiu.

“It is like in an aeroplane, you always look at who built the engine, it is the most important thing,” the Kano-born billionaire added.

Minister Delegate for Foreign Trade and Economic Attractiveness Riester believes this club is, “one of the things that will help build up the necessary intrapersonal relationships” between industrial players in the two countries, part of a wider French strategy of greater engagement in anglophone Africa.