THE NATION ON SUNDAY JULY 31, 2011
C
AN you shed more light on the Investment drive of the government in respect of the proposed petrochemical plant in a part of the state? We have received some investors from Saudi Arabia and India. The Saudis came in mainly for the petrochemical plant which is to be located at Koko, and also the Indians for the petrochemical plant also for Koko. Let me first of all start by saying that these projects are projects initiated by the Federal Government and President Jonathan’s administration through the Nigerian Natioanl Petroleum Corporation (NNPC) and Ministry of Petroleum Resources in conjuction with foreign firms. We are lucky and fortunate that these projects are to be sited in Delta State that is why we are actively involved to ensure their successes for obvious reasons. These projects started several years ago when the NNPC initiated the Nigerian Master Gas Plan. Then I was just coming in as the governor for the first tenure and I took a lot of interest on what they were doing knowing that Delta State is a state with a lot of gas reserves apart from the oil. I took an interest in what they were doing and I got in contact with the officials in NNPC and I was invited to be part of the team that went round the world on a road show for the Nigerian Gas Master plan. And at those meetings in UK, Singapore and other parts of the world, I had to talk on the security issues in the Niger Delta because then security was a major problem. I did this because I was hoping that the Federal Government would use Delta State for whatever projects they would want to develop under the Nigerian Master Gas Plan. I got in touch with a lot of people and fortunately as the master plan was being unveiled by the President himself we were happy to know that Delta State is a major beneficiary of the master plan. The master gas plan has three project facilities one in Akwa Ibom, the second in Rivers State and the third one is in Delta State. The contract for the feasibilty study for the plants in Delta State has been awarded. But beyond that, we found out that as part of this master plan, companies have already started taking interest in siting petrochemical plants in Nigeria, and Delta State was chosen as a favoured location of the petrochemical plant by the Saudis. And when the Indians came too they chose Delta State for the fertilizer plant. One of the things that again helped us on the choice of Koko location is the Export Free Zone that we have pursued very rigorously under the Yar’ Adua’s administration. He graciously approved one for us; the Koko free zone. And that obviously helped in the choice of Koko for this plant because we know investors, from the world over, are very interested in the issue of tax. We did a lot of work in ensuring that Koko attained the EPZ status. The Nigerian Master Gas Plan is an arrangement that ensures that the natural gas that comes from the ground – let me explain that every industry in the oil and gas industry is prospecting for oil. There is no
Business
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‘Delta State now preferred destination for investors’ Delta State Governor, Dr. Emmanuel Uduaghan, recently addressed the media in Warri, on sundry issues, including the viability of a petrochemical and fertilizer plant to be sited in Kokomo, Warri North, as well as other projects. Shola O’Neil was there. company that is prospecting for gas and this oil what comes out as a by-product, is gas. So, that is what they call flared gas. Now what happens is that most of it is flared as waste product. What the Federal Government wants to achieve with the master gas plant is to ensure that all the gas that is flared is collected to a port and pulled towards the central processing plant and that plant dries the gas. That is, takes the waste part away and leave the dry gas for the domestic use. What is the probably cost of these plants? Now the petrochemical plant and fertilizer plant are huge projects that amount to over 10 billion dollars. In fact, the two of them will cost about 16 billion dollars and it will be one of the heaviest investments in this country in recent years. And having a 16 billion dollars investment in a state might not be seen as much on the surface, but if you figure out the employment opportunities for this investment you will appreciate it better. This in itself will be two fold. First, the construction alone will employ a lot of our people. There is also indirect benefit for those who will offer services to the people that are constructing. The woman for example, who sells mineral or rice by the construction site for the construction workers will benefit from it, the public transport owner who will transport the workers from Warri to Koko will also benefit from it. So, the benefits are quite huge. And of course, when the plants are finished they will employ many thousands of persons and many of them will be people from Delta State. So, we have a lot of benefits from it and there are other associated industries that will spring up from these plants. Industries that will utilize the by-products of these plants, and industries that will make parts for these plants will also benefit. So, with the cooperation of every Deltan and everyone around, the future is very bright. With the completion of the Asaba Airport, how would this impact on these investments? With the Airport in Delta State, we are beginning to see a Delta State that is the hub of every investor coming to Nigeria. Now the airport is an infrastructure that will support investment. With the gas plants and other investments they are our effort at diversifying our economy. There are three things every investor looks for in trying to locate his investment. One is power (electricity) because now most investors are spending about 45 per cent of their working capital on power. With adequate power supply that can be reduced and the profits increased.
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THE EXECUTIVE
construction of the base to the time the turbines will come so that they don’t come and remain at the port like the one that stayed in the port for two years. We are tying the construction of the turbine with the construction of the base. By August we will start testing. We test at the point of manufacture and not on the ground. After testing, I think it takes about four to six weeks to test before they start plugging them. So hopefully by then we would have finished the base. There is problem of under utilisation of ports in the state because of the issue of Escravos Bar Dredging. How can this be addressed? Fortunately, going to Koko does not require coming to the Escravos side. You know that there are two entry points into Delta by sea. You have the Escravos side and you have the Benin River. The Benin River is also a part of the route but dredging it is not very difficult to handle. The Escravos one is a little bit complex because there are pipelines that criss-cross it. But the one in Koko is much easier compared to Benin River. It is still shallow, I heard that it is about 7 to 8 metre depth and it is much easier. We are also working with the NPA.
•Uduaghan
“With the Airport in Delta State, we are beginning to see a Delta State that is the hub of every investor coming to Nigeria. Now the airport is an infrastructure that will support investment. With the gas plants and other investments they are our effort at diversifying our economy” The other thing that is very important to an investor is the issue of transportation. And when we talk about transportation, we are talking about sea ports, air ports, roads and railways. These are things that easily move goods for investors either in or out. Each investment require transportation, sometimes cargo to planes to fly their goods and the Asaba Airport will be the quickest airport to the location of these plants. So, it is just for them to fly their goods to the Asaba Airport. Even though some of the equipments would be coming by sea, we know that some that they have to use quickly would have to be flown in and the Asaba Airport is
closest. Also with the dualization that we are doing in Koko, within one or one and half hour, their goods are already in Koko. So, it is easier for them not only to transport human beings but also the goods too. Delta State’s Independent Power Project has been dogged by controversy. What is the situation now? We have already gone to inspect the turbines which testing will begin by August. By the time they finish testing they are going to return back and I believe they have start working at the base where you put the turbine. Like I keep explaining, the importance is not the base; the important is to have proper return. And you must tie the
How much will dredging Benin River Channel cost the state and what is government’s commitment to the projects? The dredging is a Federal Government project. So, I do not know how much it is going to cost them. Two, it is going to be very difficult to say that this is how much the state government is going to spend on the project. What we do is get some infrastructure ready. Now, the task itself is in preparing the EPZ and we are begging investors to come in and develop it. Fortunately, we have some companies that are interested in developing the site. And what does this site means? It means building industries, building houses for the workers, constructing the roads, putting the entire plant itself, the water system, sewage system, all these are integrated infrastructures that are required by the company. Now what investors do is that, if a company for instance, constructs a house for the workers, they charge the parent company for utilizing those houses. So, those are the top investments that are available. If an investor comes and put a power plant within that area, it supplies power to every company that is there and they pay. Like I told you, it might not require the government directly investing in infrastructure in this place. And we are already directly in contact with those who are interested in doing those things.