The face-off between Dangote Refinery, Petrochemical Plant, and Pinnacle Oil & Gas Ltd seems to have escalated.
Trouble started when Dangote Refinery, yesterday questioned Pinnacle Oil’s decision to lease its tank farms to an entity with no retail outlets in Nigeria, particularly given their proximity to Dangote’s refinery.
The company expressed concern that such actions could be part of a broader strategy to undermine Nigeria’s refining capacity, similar to the challenges faced by the refineries in Port Harcourt, Warri, and Kaduna.
It further warned the oil company not to hide under the guise of deregulation to blend off-spec products.
Firing back in a late-night statement on Wednesday, November 6, 2024, Pinnacle Oil and Gas advised the refinery not to see it as a rival or competitor but as a partner in Nigeria’s bid to evolve into a petroleum hub that will serve not just the Nigerian market, but even the international markets, rivalling any other petroleum hub anywhere else in the world.
The company also debunked allegation of blending substandard petroleum products while noting that it is well known to all persons knowledgeable on the Nigerian oil industry, that there are clear standards for petroleum products either imported or locally refined, and there are eminently qualified regulators charged with the responsibility of enforcing these standards.
The statement from Pinnacle reads; “On November 5, Dangote issued a Press Release titled, “Pinnacle Oil and Gas FZE: Our Stand. Upon our review of this release, we found it to be replete with inaccuracies and gaps.
“Thus, while we would generally not be drawn into exchanges on corporate issues in the public media, it is our duty as a responsible corporate citizen to put all the facts on the table to ensure that public discourse on this matter or the future direction of the Nigerian petrol distribution market has the benefit of some salient facts as well as improved appreciation of the operations of the Pinnacle Lekki Terminal.
“The Pinnacle Lekki Terminal is a … terminal with designs and approvals for over 1 billion litres of storage capacity, of which over 300,000,000 litres of storage are already in place, receiving products from a Single Point Mooring (SPM) facility and a Conventional Bouy Mooring (CBM) facility, both of which are connected to our storage via a network of over 40km of deep-sea pipelines.
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“This facility is equipped to both receive or export refined products.
“Our facility has been in operation since 2021 and has during this period proved to be the. It provides services not only to Pinnacle Oil and. Gas Limited but also to numerous market players in the Nigerian petroleum industry.
“The facility is not a refinery and is not even a substitute for a refinery. It is rather a complement to any refinery, by providing them additional options for product storage and expanded channels for efficient product dispatch across the Country either by vessel or by truck.
“To be more specific, a connection between our facility and the Dangote refinery would immediately put at the refinery’s disposal additional storage and additional distribution channels, reducing the need for trucks to queue endlessly waiting to load at the refinery, and allowing more efficient load out to buyers who may opt to convey their products by sea to other inland markets like Warri, Port Harcourt or Calabar saving the significant costs of overland distribution.
“It was in line with this that we entered discussions with Dangote Refinery and jointly executed a pipeline inter-connection agreement in 2022, which would facilitate the development of a pipeline to facilitate the efficient distribution of their products across the Country.
“The agreement is still in place, and we are yet to be informed of any change in Dangote’s appetite regarding the project. This model of connection between refinery and storage terminals is not our invention, rather it is a time-tested and proven model operating across the world in other Petroleum hubs such as Rotterdam, Antwerp, Ulsan (South Korea) and the like. These hubs host multiple refineries and multiple terminals such as Pinnacle’s. This is what informs our view that the Lekki hub requires not even just one Terminal like Pinnacle’s, but rather 3 or more, and perhaps even more refineries in the future.
“Regarding the allegation that our facility blends sub-standard products, we reject the notion in its entirety once more. In any case, it is well known to all persons knowledgeable on the Nigerian oil industry, that there are clear standards for petroleum products either imported or locally refined, and there are eminently qualified regulators charged with the responsibility of enforcing these standards.
“Our operations have always met those standards and will continue to do so. Our facilities have also always been open to these regulators for inspection and monitoring, and that will not change in the future.
“In conclusion, we would like to make it clear that our only focus is and will remain the delivery of refined products to Nigerians in the most cost-effective manner possible to ensure that the ultimate pump prices of refined products do not further impoverish the average Nigerian.
“In prosecuting this crusade, we see Dangote not as an enemy or competitor but as a partner towards the evolution of a petroleum hub that will serve not just the Nigerian market, but even the international markets, rivalling any other petroleum hub anywhere else in the world” it stated.
By: Babajide Okeowo
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