BUA Group has signed French company Axens, which makes systems to convert oil and biomass into cleaner fuels, has won a contract to supply the technology for a multi-billion dollar refinery and petrochemicals plant in Nigeria.
The economics of the project are a ‘no-brainer’: “Nigeria imports 90% of it’s petroleum products. We spend 35% of our foreign exchange on importing petroleum products,” BUA said.
The new refinery, with a capacity to produce 200,000 barrels per day (bpd), should be operational in 2024. By comparison, the Dangote Group project will produce 600,000 bpd.
The bidding process was managed by energy consultants KBR, which will also be handling subsequent rounds for the engineering and construction phase, currently underway.
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 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.
France’s Axens headed off strong competition from the US 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.
For Axens CEO Sentenac, 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”, says Rabiu. “It is like in an aeroplane, you always look at who built the engine, it is the most important thing”.
