Ghana: TOR Signs Agreement With Woodfields Energy Resources To Process 11 Million Barrels Of Crude

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Mr Isaa Osei, Managing Director of Tema Oil Refinery(TOR), Republic of Ghana

In what could be described as a very rare achievement, Ghana’s only state refinery, Tema Oil Refinery (TOR) Limited has suddenly become a preferred choice for major oil traders, both local and international who are now seeking for opportunities to process their crude oil at the West African nation’s refinery at a fee.

With the confidence of traders and some finance houses restored in the refinery, TOR, which, hitherto, was in the news for lack of crude, has continuously processed circa 4 million barrels of crude oil out of a total of 11 million barrels since August 2019.

This follows the signing of a tolling crude oil processing agreement between Tema Oil Refinery and Woodfields Energy Resources Limited, a wholly Ghanaian-owned oil trading company, backed by the world’s largest oil and gas trader.

Woodfields Energy’s long history with the refinery and knowledge of the energy business in Ghana, in Africa, led them to originate and lead this transaction.

The contract would ensure that TOR continues processing of crude oil into the foreseeable future.

According to the Managing Director of TOR, the refinery is currently operating a tolling model where it processes crude oil for/on behalf of third parties at a fee.

This arrangement places minimum or no risk at all on the refinery as the processor since the crude oil is purchased, transported and marketed by the third party.

Mr Isaac Osei explained that the third parties who enter into tolling agreements with TOR are confident in the new operating efficiency philosophy, as well as the transparency at TOR and are, thus, motivated to do business with TOR.

He said although the current arrangement covers processing crude oil at CDU, the RFCC, which is currently under nitrogen pressure, would also soon be engaged after negotiations between TOR and some potential partners are completed.

Mr Osei, who was answering questions from energy reporters on the side-lines of the just ended African Refiners Association conference in Accra, mentioned that aside the current tolling agreement with Woodfields Energy, TOR is also negotiating to sign similar tolling agreements with other international traders like Gemcorp, BP and other traders.

The former COCOBOD CEO attributed this development at TOR to guarantees on plant efficiency and effectiveness.

“After a careful diagnosis of TOR’s challenges, the Board and Management met with the workers and charged them to work in an efficient manner in order to restore the company to its glorious days, and I’m happy to announce that with this new operating philosophy at TOR, our trading partners have realised that TOR is technically viable and could indeed give them value for money with the right structures in place,” Mr Osei stated.

He explained that TOR’s new philosophy of ‘operating efficiency’ is centred around the company’s utilities section (Power House), the power generation hub of the refinery.

Currently, TOR uses Refinery Fuel Gas (FG) that is generated as a by-product of the refining processes at RFCC and CDU. This fuel gas generated at TOR is, however, inadequate to fire the various heaters in the refinery.

The short fall, Mr Osei explained is made up with Fuel Oil in the form of AR or Cracked Fuel Oil, a high value product, a situation Mr Osei observed used to erode the refinery of its profit margins.

To surmount this challenge, Mr Osei revealed that the commerce and technical teams ensured that TOR came up with both long and short term strategies.
In the short term, the company has negotiated that all processing agreements with third parties should cater for the challenge of using AR to power the boilers in the refinery.

In the long term, however, TOR has set up a technical team which has presented an actionable plan to link TOR to VRA (Volta River Authority) to tap gas from the WAPCO (West African Gas Pipeline Company) pipeline to fire the furnaces and boilers instead of using Fuel Oil,” Mr Osei stated.

It would be recalled that when the Isaac Osei team took over the company in 2017, the plants at TOR had missed three cycles of scheduled shut down maintenance and that affected its reliability and performance.

The Board at one of its earlier meetings, therefore, decided to embark on the much needed shut down maintenance to improve upon the performance and reliability of both the CDU and the RFCC.

Mr Osei further touted a number of milestones TOR has crossed in the utilities department of TOR including the full payment for a 120tph Steam Boiler which will increase steam generation capacity for plant operations and ensure reliability of the refinery’s utilities system.

The Boiler, which arrived in Ghana in the third week of October 2018, is currently being installed and is expected to augment TOR’s power generation activities after its commissioning, which is expected by next year.

Mr Osei lauded the Nana Akufo- Addo government for the current positive developments at TOR.

He mentioned the immense support the government has given to TOR through the Ministries of Finance and Energy.

“TOR has reached this stage because the government believed in the strategic role we play here at TOR and has, thus, assisted us in many ways, including restoring our capacity and ensuring efficiency in our power generating activities. I’m happy to inform you that with the support of the government, TOR has completed the payment for its second heater and our capacity would be restored to the nameplate capacity of 45,000 bpsd, by the end of the first quarter of 2020. This means TOR will be able to refine one million barrels of crude oil in just 22 days, thereby, making room for more companies to refine their crude oil at TOR.”

The TOR MD further revealed that the TOR Board of Directors have been extremely supportive in this new development. He said the workers of TOR bought into the new challenge when they were tasked by the Board and management to embrace the new operating philosophy of efficient TOR.

Nonstop crude oil flow does not seem to be the only feat chalked by TOR.
Mr Osei said through the ingenuity of the maintenance division, loading rack 3, which was gutted by fire in 2010, has now been rebuilt at the loading gantry.
He was hopeful this would reduce the turnaround time at TOR’s loading rack and further help in serving customers better.

 

Source: www.energynewsafrica.com

 

 

 

 

 

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