Nigeria offers terminal establishment licenses, expanding export storage capacity and attracting investment while creating jobs and addressing climate change in the petroleum industry.
In a significant milestone for Nigeria’s petroleum industry, the Federal Government announced on 13th June that it had offered its first terminal establishment licenses under the Petroleum Industry Act (PIA). The Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) granted the licenses to Nigeria National Petroleum Company Limited and Balema Oil Producing Limited, with the aim of attracting more investors into the sector. This development is expected to address unemployment, particularly in the Niger Delta region, while significantly expanding Nigeria’s export storage capacity by over four million barrels.
Expansion of Export Storage Capacity
According to Farouk Ahmad, the Chief Executive of NMDPRA, the licences granted to NNPC Exploration and Production Limited will facilitate the establishment of a 2,179,747 barrel crude oil terminal at Offshore Akwa Ibom State within Nigeria’s Exclusive Economic Zone. Additionally, the Belema Sweet Export Terminal will see the creation of a 2,000,000 barrel crude oil terminal at the Southern Part of the Exclusive Economic Zone, 20 nautical miles from Kula. These developments mark a crucial step towards strengthening Nigeria’s export infrastructure and improving its position in the global petroleum market.
Investment Opportunities and Ease of Doing Business
Ahmad emphasised that the government’s move to offer these licences signifies a fresh approach aimed at attracting more investors to the sector. The NMDPRA aims to enable investment by ensuring ease of doing business and facilitating a favourable investment environment. The successful establishment of these terminals is expected to encourage further private investment in crude oil terminals, thereby enhancing Nigeria’s oil industry and stimulating economic growth.
Job Creation and Addressing Climate Change
The President of Balemaoil, Tein Jack-Rich, highlighted the project’s potential to address various industry challenges and contribute to job creation in Nigeria. The establishment of the terminal is projected to create 100,000 jobs in the Niger Delta and across the country. The infrastructure will not only improve operational efficiency, storage, and production security but also provide transportation solutions for Nigeria’s petroleum industry. Importantly, the project’s hybrid nature, integrating green energy generated from installed 3.6MW wind turbines with traditional energy sources, reflects a commitment to reduce carbon emissions and protect the environment. This pioneering operational model is the first of its kind in an oil export terminal worldwide.
The granting of terminal establishment licenses under the Petroleum Industry Act represents a significant milestone for Nigeria’s petroleum industry. By expanding export storage capacity and attracting investment, the government aims to bolster the sector and address unemployment, particularly in the Niger Delta region. The project offers a fresh approach to investment and reflects the government’s commitment to creating a favourable business environment. Additionally, the infrastructure’s hybrid design, combining renewable and traditional energy sources, demonstrates Nigeria’s dedication to addressing climate change challenges. The successful implementation of these initiatives is expected to boost Nigeria’s position in the global petroleum market, drive economic growth, and provide numerous employment opportunities.
