Pinnacle Oil & Gas Explains Deal with Dangote Refinery for Use of Lekki Terminal

*Says new refinery partner, not competitor

* Insists it will never sell substandard products to Nigerians

Emmanuel Addeh in Abuja

Pinnacle Oil and Gas yesterday refuted insinuations by the Dangote Refinery that the company ‘deceitfully’ approached it and pleaded that it extended its pipeline from the refinery to its tank farms for the purpose of blending its ‘high-quality’ products with their imported products and selling them to Nigerians.

In a statement made available to THISDAY, the company stated that there was actually a contractual agreement between both companies on the use of the terminal in order to reduce operational costs.

“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.
“It will also allow 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 interconnection 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,” the company stated.

This model of connection between refinery and storage terminals, Pinnacle said, is not its invention, explaining that it’s rather a time tested and proven model operating across the world in other petroleum hubs such as Rotterdam, Antwerp, Ulsan (South Korea) and the likes.

These hubs, it contended, host multiple refineries and multiple terminals such as Pinnacle’s. This, Pinnacle explained, is what informs its view that the Lekki hub requires not even just one terminal like its own, but rather three or more, and perhaps even more refineries in the future.

Upon its review of the earlier release by Dangote, Pinnacle stressed that it found it to be replete with inaccuracies and gaps.
Thus, while the company said it would generally not be drawn into exchanges on corporate issues in the public media, it pointed out that it has a duty as a responsible corporate citizen to put all the facts on the table.

It stated that this was to ensure that public discourse on the matter or on the future direction of the Nigerian petrol distribution market has the benefit of a number of salient facts as well as improved appreciation of the operations of the Pinnacle Lekki Terminal.

“The Pinnacle Lekki Terminal is a world class refined products 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 Buoy Mooring (CBM) facility, both of which are connected to our storage via a network of over 40km of deep-sea pipelines.

“This facility is equipped to both receive or export refined products in a very efficient manner that reduces handling costs and loading time. Our facility has been in operation since 2021 and has during this period proved to be the most efficient refined products handling facility in the country.

“It provides services not only to Pinnacle Oil and Gas Limited, but also to numerous market players in the Nigerian petroleum industry. It is well known that this facility saves the country a huge amount in forex denominated handling costs compared to what obtains in competing facilities across the country,” it added.

The facility, Pinnacle said, is not a refinery and is not even a substitute for a refinery, but rather a ‘wonderful’ complement to any refinery, by providing them additional options for product storage and expanded channels for efficient products dispatch across the country either by vessel or by truck.

Regarding the allegation that its facility blends sub-standard products, Pinnacle Oil and Gas rejected the notion in its entirety, explaining that 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.

In addition, it observed that 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,” it affirmed.

Pinnacle made it clear that its 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,” the company stated.