Isaac Osei, Agyarko fight over TOR tank farm idea

CEO of the Tema Oil Refinery (TOR), Isaac Osei, has said he is not in favour of a proposal by Energy Minister Boakye Agyarko to convert Ghana’s only crude oil refinery into a tank farm.

Mr Agyarko announced his intention at an Offshore Technology Conference (OTC) Houston, Texas, recently, saying the government intends establishing a new refinery hub in the Western Region, where most of Ghana’s oil activity takes place, to serve the West African sub-region.

Mr Agyarko said the new refinery would be ready within three or four years, and would be able to refine about eight times more crude in terms of quantity than the current 20,000 barrels per day by TOR.

Speaking to journalists on the sidelines of the Downstream Petroleum Colloquium by the National Petroleum Authority (NPA) in January 2018, Mr Agyarko said: “We want to make sure that in the next three to four years, we build a brand new TOR of about 150,000 barrels of oil per day throughput and then gradually ease out the old TOR which becomes a tank farm for the new TOR”.

He said: “Because the new TOR currently is at 20,000 barrels of oil per day, which is not satisfactory and if you ramp it up, the most you could get out of the old engine is 80,000 barrels of oil per day.”

According to Mr Agyarko, the building of a new refinery “is to create a hub in the Western Region where you have the refining, storage, transportation and trading all happening within an enclave. It will be largely export-oriented.”

Mr Agyarko said: “We’ve already put in place an implementation committee which is looking at all the facets and the regulations required. … In my speech, I made reference to the need to make adjustments to the law.

“We’ve sent out the various teams to look at all the other hubs that operate in the world. I believe that in the not too distant future – two, three years you will begin to see the actual manifestations of these developments,” Mr Agyarko said.

The minister’s reiteration of the TOR tank farm idea, has sparked opposition from Mr Osei, who told journalists at the OTC event that: “I didn’t come to TOR to preside over its demise”, adding that: “…It’s also part of our strategic plan to ensure that the existing refinery works and I have no doubt in my mind that with the technicians and engineers that we have, TOR, now in a better place than it has been for year, will work”.

The TOR CEO noted that as a national asset, the current refinery should be protected rather than converted into something is was not built for.

“I don’t think the conversion into a tank farm is the way forward. I don’t even know whether it is government policy, but once my minister has spoken about it at an international forum such as OTC where we are now, I will continue to engage the minister.

“We’ve spent a lot of money rehabilitating the plant, we have had three missed cycles of maintenance, as a result, since 2009, there has been no shutdown maintenance at all but now we’ve been able to do this and a lot of money has been spent.

“We cannot, going forward, be accused of spending money then scrapping TOR. The work which has been done by our maintenance team is exemplary, and I think we should encourage that team and prepare for the turnaround maintenance in two years.

“The implications of the statement which was made by the Hon Minister is that it may have an effect on the investing public, which is here and also those of our partners whom we are dealing with”, Mr Osei noted.

The CEO is not the first top TOR executive to fight the idea of converting the refinery into a tank farm. Recently the Board Chairman of TOR, Tongraan Kugbilsong Nanlebegtang, said the Board of Directors has no plans of converting the refinery into a tank farm.

The Paramount Chief of the Talensi Traditional Area in the Upper East Region, in a press statement, gave assurance that the refinery is capable of processing crude oil for the Ghanaian market and sub-region contrary to the assertions of the Energy Minister.

According to the Board Chairman, TOR would soon run a full refinery, as soon as all the maintenance works are completed.

He noted that an amount of $50 million has so far been spent by the company to replace damaged equipment, adding that a new crude heater was procured to replace an old one that got damaged prior to the commencement of the tenure of the new board.

“Having undertaken general shutdown maintenance, particularly the processing plants, we hope to be on stream soon. The Power House will receive a new 12-ton capacity boiler to augment Steam and Power generation latest by the 3rd quarter of this year. The exploded furnace is also under construction and will be shipped from overseas to Ghana by early January, 2019. This will put the plant on its maximum operating capacity upon installation,” the chief said.

According to the Board Chairman, the board and management have drawn up a strategic plan to build a new refinery with a capacity of 100 to 120,000 BSPD (Barrel per Stream Day) within its catchment area.

TOR, he said, would use the available land at the refinery to undertake the project soon.

“The Board is focused on its mandate and would restore the Tema Oil Refinery and expand it to operate as a profitable premier refinery in Ghana and beyond,” he added.