The construction of a new frication yard that will generate over 50,000 jobs for Nigerians is to commence next month. The building of the yard will be completed in 2015 by the Lagos Deep Offshore Logistics (LADOL) base.
The Lagos Deep Offshore Logistics (LADOL) base and Samsung Heavy Industries are working on expanding its fabrication capacity from 10,000 tons to 40,000 tons to service Floating Production Storage and Offloading (FPSO),oil rigs, ship repairs and maintenance.
The move is to centralize mega oil and gas and maritime fabrication jobs for West Africa in Nigeria.
Lagos Deep Offshore Logistics (LADOL) base is located at the Lagos Free Zone (LFZ), within Apapa Pilotage District.
The LADOL base, which had earned the status of a free zone in the Federal Government gazette, is reputed to be the only 100 percent indigenous facility of its kind in the country.
Already, it has invested over $150 million in green field development as part of efforts to create a one- stop shop for the maritime oil and gas industry.
Job creation
The Managing Director of the company, Dr Army Jadesimi explained few days ago that the free trade zone would provide 5,000 jobs inside the company while 50,000 would be created outside the base.
She explained that the design of the project gulped $27 million while the project development costs $10million.
She added that the company had signed 19 agreements with Samsung on various projects, saying it was part of the efforts to create employment for Nigerians.
Jadesimi declared that some people had gone to Korea for training. According to her the company can boast of 1,000 skilled welders.
Agencies’ approval
Jadesimi noted before the company embarked on the project, Nigerian Ports Authority (NPA), Nigeria Export Processing Zones Authority(NEPZA) and department of petroleum resources (DPR) had approved the project.
She noted that an environmental assessment of the area had been carried out.
Jadesimi stressed that LADOL’s joint venture with Samsung to build Nigeria’s first and only Africa’s FPSO facility would made Nigeria
Africa maritime and oil and gas hub, creating 100,000 Jobs.
She added that NPA planning approval for FPSO quay for integration was granted last month, nting that detailed design was completed in August, 2013.
The managing director stressed that total investment in FPSO facility at the base had gulped $102.5 million.
Green field development
She added: “LADOL is the only 100per cent Nigerian logistics base owner in Nigeria and the only one to develop a facility from a zero value greenfield NPA site into a $500 million world class base.
“ We are now expanding our facilities and the proven business model of private indigenous Nigerian lead development of facilities, into Bayelsa as well as extending its facility in Lagos with a $500 million
“LADOL has been given all required approvals to proceed with construction and based on the approvals the government has given $62.5 million has been invested already; this is new private investment in developing infrastructure in Nigeria.”
The managing director also explained that more than 200 personnel had been trained at LADOL.
According to her, the company’s database had a about 200 certified welders and had already employed many of them for various Ladol projects.
Capacity building
She added that most of the welders were ABS certified to G5 welding standard and would only require re-testing and certification to the Samsung technical specifications.
Also, the managing director explained that the company’s new phase of investment would be the building of quay walls to support an FPSO platform.
Jadesimi however, lamented the lack of adequate awareness on the part of some international industry operators, who, according to her, were yet to explore the advantage of the facilities to have their maintenance jobs done.
She said: “The company and Samsung Heavy Industries of Korea, last year entered into partnership to boost human capacity and Nigerian content development in the oil and gas industry through the establishment of Samsung Nigeria Technology Academy (SaNTA).
Jadesimi said the two companies would invest $10millions in equipment and man-hours in building the facilities.
Investment
Although, she noted that LADOL commenced full operations just a few years ago, it’s over $150 million dollars investment had already soared with groundbreaking jobs such as the famous Agbami Floating Production Storage and Offloading (FPSO) platform whose installation was completed at the base, as well as a giant Noble Drilling Rigs maintenance recently undertaken at the base, amongst others.
In 2011 alone, LADOL handled about three major repair jobs for Ben Avon, Transocean including one of the largest rig repair job ever executed in Nigeriawas Noble-Percy Jones rig.
Jadesimi noted that repairing rigs in Nigeria, had helped the country to benefit from technological transfer through training of pool of manpower, who took part in the repair process.
Hub status
She declared: “For us to be the hub, we must show the outside world that we can do it. That explains the need for us to contribute to conferences like the Logistics West Africa Conference, where we showcased what we can do to the outside world. So, you will blow your own trumpet and show the world that what they see at OTC (Offshore technology Conference), they can also see here.
“So, this business of Nigeria becoming the hub of maritime and off-shore oil and gas operation in the region, means the country becoming the first port of call when it comes to maritime and oil and gas shipping, investment technology and upstream oil and gas engineering investment will not be sustainable if it goes to small countries with less than 10 million population, because we have the volume and the population. Nigerian is the best suit to be the hub and thank God, we now have an administration that understands the need for this.
It will be more beneficial to the West African sub-region in terms of collaborations and partnerships and technology transfer to have Nigeria, their next-door neighbour being the hub.
“Also it is going to be beneficial to the man in Ghana to come to Nigeria to see how the integration of his FPSO is going, than going to South Korea. With regard to technology transfer,; our expertise can be borrowed by the neighboring countries.”
Local content
She explained that LADOL was the only facility of its kind in Nigeria being the first green field specifically designed and built deep offshore logistics base as a wholly indigenous Nigerian facility. The organization is a champion for local content and one of its greatest success stories is in the provision of a hassle free onshore and offshore logistics support for oil and gas production and exploration.”
Jadesimi said the company was pioneering domestication of jobs that would ordinarily have gone abroad.
“Last year alone, we have domesticated $ 60 million (about N9.7 billion) that would otherwise have been spent abroad. We have done in the country, the repair of no fewer than 15 Oil Rigs. But for every one rig we did three more had gone elsewhere. It shows that there is huge domestic investment gap in the industry,” she said.
LADOL is registered as an International Ship and Port Facility Security (ISPS) code certified port with the International Maritime Organization (IMO).
It provides services to local and international vessels, with a 200meters quay, 8.5meters draft, 25tonnes/m 2 high load bearing area and additional 30tons bollards at either end.
Its LADOL’s quay can accommodate up to six supply vessels and three Heavy Lift Vessels simultaneously.
The berthing crew work 24 hours a day and since products are piped directly through docks in the quay, vessel turnaround time can be less than 8 hours.
The Free Zone currently has several hectares of developed and serviced land that is ideal for large fabrication from pipe coating to jack-up rigs and FPSO topside manufacture/assembly.
The facility is a fully integrated independent deep offshore logistics services with 24 hours logistics support for cargo, vessels, barges, crew changes, project support, personnel support (including accommodation and recreation) etc.
Jadesimi noted: “We also have been authorized by the Nigerian Export Process Zones Authority pursuant to the Nigeria Export Processing Zones Act (Act No.63 1992) to operate as a free zone.
“The principal focus of the company is the provision of logistical, engineering and other support services for deep water offshore oil and gas exploration. As a designated Free Zone, the facility offers its clients several benefits including: Exemptions from Federal, state and local governmental taxes, No customs duties or levies. Also, importation of raw materials, machinery, equipment and spare parts are duty free.
“We equally have permission to sell 100 percent of manufactured/processed goods into domestic market on payment of applicable duty and taxes. There is also permission for 100 percent foreign ownership of investment, 100 percent repatriation of capital, profits and dividends and we offer one- stop -shop for all transactions.
Finance
“We have so far invested over $150 million in transforming the swampland of the Apapa port axis in Lagos into a world class one stop shop deep offshore logistics base and free zone now known as LADOL Free Zone.
“As a matter of fact, the major challenge of establishing businesses that require long term funding in Nigeria is bank financing. Also problematic is in the sourcing of funds from Nigerian banks.
“If you are borrowing US dollars from elsewhere in the world, you are looking at liable of 2-3 percent but if you are borrowing dollars from Nigeria it attracts liable and another 15 percent interest. Also, elsewhere in the world, if you are developing maritime infrastructure, you are looking at 10 year financing, but in Nigeria you will be lucky if you are able to get three years financing.
But what has happened in recent years is that Nigerian banks have developed the capacity to give long term financing to maritime projects.
