The Federal Government has granted approval to the proposal of Pinnacle Oil and Gas Limited to construct a $250m (N40bn) Single Point Mooring facility.
The Minister of Transport, Senator Idris Umar, said the approval for the construction of the facility was granted by President Goodluck Jonathan.
Umar spoke in Abuja when he hosted top officials of Pinnacle Oil, who paid him a visit.
The facility, which will be located in the Lekki Free Trade Zone, Lagos, consists of an 11-kilometre sub-sea and an offshore pipeline network with capacity to handle a significant part of the total national refined petroleum products’ demand.
Umar said the approval became necessary since the issue of logistics in the downstream sector had been a source of worry to the Federal Government.
He said with the approval, the infrastructure gap in the supply chain of the downstream sector in the oil and gas industry would be eliminated.
The minister said the project was in line with the Federal Government’s reform programmes in the oil and gas sector, which is aimed at reducing the landing cost of petroleum products.
Umar said the SPM would help the country to save billions of naira as well as bring down the cost of fuel and living by creating an effective offloading and distribution channel for petroleum products.
The Managing Director, Pinnacle Oil, Mr. Peter Mbah, said the development of the facility would open a new vista of opportunities in the downstream oil and gas industry as a whole, thus attracting more investment to the country.
He said with the approval, the project would be completed in record time since the company had already secured both the technical and financial competence to deliver the facility.
Mbah said the project would address the environmental challenges of congestion at the Apapa Kirirkiri tank farm as well as reduce ship-to-ship operations.
The facility, according to him, will help to create 5,000 jobs at the initial stage and eliminate any need for other trans-shipment operations.
He stressed that the project would also negate any need for investment in the construction of a shore side jetty in the Lagos area.