Lee Engineering and its quest to transform Nigeria into an oil & gas industry equipment fabrication hub
Barely eleven years after the enactment of the Nigerian Local Content Act in 2010, a good number of indigenous firms in the country’s oil and gas sector have shown commitment to harnessing the opportunities offered by the law.
Undoubtedly, the implementation Act has brought about huge improvement capacity development with some local players now pioneering in areas hitherto in the prerogatives of foreign firms.
Consequently, committed entrepreneurs are now striving into various aspects of the industry to provide excellent service, hence paving the way for growth and development.
In this regard, Lee Engineering and Construction Company Limited, an Engineering, Procurement, Construction, Operation and Maintenance (EPCOM) firm has not only shown outstanding feat but is set to take the central stage in industrial equipment manufacturing.
Encouraged by the Local Content Act and invaluable support from management of the Nigerian Content Development & Monitoring Board, the firm committed over $100 million into the construction of a fabrication yard in a land covering about 10,000sqm Warri, Delta State, it’s operational base.
The project which is due for commission before the end of the year will guarantee the fabrication of any equipment required in the oil and gas industry locally and the African spectrum.
Speaking to journalist on a guided tour of the facility which is said to be 90 percent completed, Chairman/Chief Executive Officer (CEO), Lee Engineering and Construction Company, Dr. Leemon Ikpea said, when commissioned the factory will serve as a hub for local manufacturing of various equipment for use in the oil and gas sector and beyond as we are cutting boundaries across Nigeria as well.
He noted that “Presently, all manners of steel fabricating machines have been installed and Nigerians with the necessary expertise operating them perfectly.
Narrating how he came about the idea which has committed huge funds since 2012, Dr. Ikpea said it dates back to the 1980s when he worked as an administrator in the sector, specifically at the Warri Refinery and Petrochemical Company Limited, (WRPC).
He said while working as a manager at Snamprojettif, a contracting firm servicing the WRPC he saw the potential of Nigerian skilled workers and realised it can be enhanced for the good of all.
Hear him, “When I was a manager I did not just sit down in my office. I took time to understand how the company operated; in that time, I noticed that many Nigerians were performing various tasks as electricians, welders and so on. The foreigners were mostly there as supervisors. There were many skilled Nigerian workers around.”
The wisdom of capitalising on available potential drove him into incorporating Lee Engineering and Construction Company in 1991. Thirty years after, the firm has established itself as a major player in its core concept of engineering, procurement, construction, operation and maintenance (EPCOM) and is venturing into industrial equipment fabrication.
Make no mistake, Dr. Ikpea and his team of young but enterprising staff are not newcomers in fabrication, as they have in the past years proven their competence.
Testifying the firm’s efficiency in job execution, Shell Petroleum Development Company (SPDC) said this about Lee Engineering on the execution of its Utorogu gas plant, in Delta state. “As much as possible, SPDC employs Nigerian companies and workers to execute projects. In the case of Utorogu, LEE Engineering & Construction Company Limited – a Nigerian company – won the main contract that carried out the design, procurement and construction work required to upgrade the Utorogu plant.
“A large proportion of the heavy equipment used to connect the gas wells to the gas plants was built in Nigeria and much of the construction materials and supplies including power cables, cable trays and accessories, paint and civil infrastructure materials were locally manufactured.”
Responding, Dr Ikpea said the materials used for the job were fabricated in his factory in Warri. He stated that having executed such high profile jobs including the building of the Port Harcourt Refinery jetty, and currently involved in the fabrication of two modular refinery factories his company is set to expand the frontier of industrial equipment fabrication in Nigeria and Africa in general.
National Economic Benefits
The goal of making Nigeria in general and the company, in particular, serve as a hub for local manufacturing of various equipment and pursuing it unwavering is worthy of commendation. Better still when the company currently provides jobs for over 2,000 people.
Furthermore, the multiplier effect on the economy in terms of reducing the burden on foreign exchange, infrastructure growth and development, additional job creation, income to government coffers in terms of taxes and levies, reduction in port congestion, reduction in man/hour wastage, etc.
It will, therefore, be in the national interest not only for governments at all levels to patronise him but for the Federal Government to make it mandatory for the OICs and multinationals to patronise the company.
Speaking on why he embarked on the multi-million dollar fabrication plant project, Dr. Ikpea said, “Our mission is to produce high quality, reliable and durable products, through competent workforce and technology, within regulatory laws. We intend to change the existing orientation of clients procuring similar components abroad with scarce hard currency and, in the process boost the national economy and reduce procurement lead time.
“If you look around the oil and gas sector, most production is done outside the shores of this country and if we fold our hands and wait for government, foreign firms and partners to transfer technology to this country, I don’t see that happening. Considering the market situation, if they transfer technology to you, the question to ask will be: who will be buying from them?” he said.
Prior to the pre-commissioning era, the management of Lee Engineering has entered into a critical partnership with foreign equipment manufacturing companies who supplied the machines to be used for fabrications.
The relationship led to over 30 personnel of the company being sent abroad for on-the-spot training on how to install and operate the equipment.
To further ensure meeting global standard requirements, Dr. Ikpea went for the factory acceptance test in Europe and is currently waiting for the project to be fully completed, then go ahead to do the test run after which President Muhammadu Buhari will be invited to commission the factory.
Mr. Osere Damian, a Senior Supervisor who spoke with reporters said over 10 persons in his department have attended overseas training in the last ten years in preparation for the full take-off of the project.
He listed some key oil and gas products the plant will be fabricating and manufacturing to include high-pressure vessels, heat exchangers, water bath heaters, glycol, skids, scrubbers, process modules, storage tanks/Columns and flare systems.
Also, other items are: drums, piping spools, enclosures, gas cylinders, flanges, milling of oil and gas tools, oil, gas and general fabrications as well as carrying out maintenance on existing pressure/process vessels and their components.
Mr Osene proudly confirms to reporters that when fully operational the firm can fabricate all equipment required for establishing a refinery. He stated that currently, they are engaged in the construction of two modular refineries, one in Bayelsa state the other in Imo state. He stressed that the structure materials for both projects were fabricated by Lee Engineering.
Similarly, Mr. Akporhuarho Fidelis, Supervisory Manager, Quality Control and Standards, QAIQC, said the company does not take keeping to the standard for granted.
“We test every product and make such they keep to customers specifications and International standard requirements,” he said.
However, he and his colleagues were equally trained overseas so as to function efficiently.
Although, President Muhammadu Buhari, is yet to visit the factory site, the Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo, who was in Warri and visited the factory sometime last year expressed government support to the venture.
Addressing the media after a round of inspection, he said, “The equipment that is made here are to facilitate the production of crude oil and gas, a lot of the equipment being used presently are being imported from abroad. By the time this factory is completed, a lot of the things that we import will not need to be imported anymore, they will be locally manufactured here at Lee engineering”.
The minister went further to stress how important the project will be in terms of job creation. He said: “We are interested in Nigerians being employed and from what I see right now, even though the equipment is not all here yet, they have already sent young Nigerians abroad for training and they still intend to send more, so this is something we are very happy about”.
Relating it to government desire to reduce unemployment he said, “President Muhammadu Buhari had promised to get 100million Nigerians out of poverty over the next 10 years, one of the ways this could be achieved is by encouraging industrialists to create new industries and to expand the ones they have to enable them to employ more people… By the time the factory is completed next year, the nature of its specialisation would create a situation where the country won’t have to import anymore and even people abroad can come and buy from here”.
There is no better way to actualise such lofty objectives than ensuring that the right policies that will encourage patronage of indigenous firms like Lee Engineering are speedily pursued and enacted. The time to discourage the IOCs and other operators in the oil gas sector from importing products that can be fabricated locally is here.