$50m Eraskon Lubricant Manufacturing Plant Exceeds 70% Completion, to Be Inaugurated Q4 2024

Peter Uzoho

The $50 million Eraskon Lubricant Blending Plant with 128,000-litres-per-day production capacity currently under construction in Gbarain, Yenagoa, Bayelsa State has progressed to over 70 per cent completion level.

The promoter of the project, Eraskorp Nigeria Limited, disclosed that the first phase of the two-phased project, which is also embedded with a five-million-litre base oil storage capacity, would be inaugurated by the fourth quarter (Q4) of 2024.

Eraskorp is a group of companies involved in multi-service lines in the oil and gas industry including engineering, procurement, construction, installation and maintenance (EPCIM) as well as security services, rendering services to international oil companies (IOCs) and the independent producer firms.

The project is being executed as a joint venture (JV) between Eraskorp and the Nigerian Content Development and Monitoring Board (NCDMB) in which the former holds 60 per equity share and the later holding 40 per cent equity participation.

It was conceived as a response to the huge gap in local lube production, as most of the lube products consumed in the country is imported, with its high pressure on foreign exchange and inflation, in addition to a lot of values eluding the nation as a result.

With base oil production added to the plan, the company equally intends to help solve Nigeria’s challenge of depending on imports to get base oil, which is the major raw material needed for lubricant manufacturing.

The company said the Integrated Manufacturing Complex (IMC) of the facility was almost ready for subsequent installation of major blending equipment by July.

In his briefing during a recent project inspection exercise, the Executive Vice-Chairman of Eraskorp Nigeria Limited, Mr. Maxwell Oko, informed that the Phase 1 of the project had reached over 70 per cent completion.

Oko, explained that the Phase One is the Lubricant Blending arm for the production of all grades and types of premium lubricants used for automobiles, rotating engines and other purposes.

He said the Second Phase of the project is the Chemical Production arm, for the production of major household and industrial cleaning products as well as production and drilling chemicals for the oil and gas industry.

“As at today, overall, we are over 70 per cent work done. Our expectation is that by fourth quarter of 2024, we will be commissioning. It’s important to state that our own factory cuts across the three business line of lubricant and chemical blending, packaging, and plastics”, Oko stated.

THISDAY also observed that all the process equipment for the phase one of the project had been built and on ground at the site, with the few remaining ones ready for shipment from Indian, where the Original Equipment Manufacturers (OEM) partner, Linus Projects, is based.

With the infrastructure side of the project nearing completion, the company said it was in a hurry to start production operations and begin adding value to the Nigerian economy.

Oko, said the company expects to add more value to the economy by engaging about 200 people in direct employment and hundreds of people benefitting indirectly when the plant comes on full stream.

“We expect that you join us in about three to four months when we will be doing testing, and in another six to seven months, you should be here during the final commissioning. Our expectation is that at the final commissioning, we will be breaking ground for our gas business for backward integration”, the executive vice chairman said.

“This project was initially conceptualized for 45,000 litres per day lubricant production with 3.5 million base oil storage capacity but when the design came up, the capacity of the plant increased to a double-shift operations producing 128,000 litres per day. So, that increased the cost to circa $50 million project today,” he added.

The lube plant sitting on 7.9-hectare of the 50-hectare Eraskorp Industrial Park was equally envisioned as the company’s first strategic step towards its entrance into the petrochemical space and in line with its vertical integration, as part of the facilities to be collocated within the park.

“So, the whole idea is to land at a point where we produce our feedstock ourselves. So, if we do our resins, we shall be the first customers to take up. If we do our base oil, we shall be the first customers to take up, and that is our focus”, Oko explained.

However, despite the progress recorded so far, a couple of challenges contributed to slowing down the project, which was supposed to be at the inauguration stage by now.

According to the executive vice chairman, three of such constraints had to do with funding draw down delays, erosion, and foreign exchange fluctuation.

He said erosion threatened the IMC building, which forced the company to use the money gotten from the Nigerian Content Intervention Fund (NCIF) loan to carry out shoreline protection at the site, instead of the earlier plan of using the fund to finish the phase one of the project.