BridgeHedge Refineries

BHR

BridgeHedge Mini-Refinery (BHMR)

EXECUTIVE SUMMARY

In view of urgent need for increasing in-country crude oil refining capacity BridgeHedge has decided to play a critical role in private oil refineries in the country by developing a mini refinery complex. Nigeria is currently deficit in the supply of white petroleum products, most of which are currently imported into the country. Current consumption of gasoline or Premium Motor Spirit (PMS) is estimated at 35 million litres per day, while that of kerosene is 10 million litres per day. In order to meet the deficit in supply, Nigeria currently spends between $12 and $15 billion annually. Despite the generally poor returns from petroleum refinery investment, modular mini-refineries, from simple diesel production units to more sophisticated cracking refineries are increasingly becoming a flexible and cost-effective supply option for crude producers in remote regions.

This is particularly why we believe there is a need to adapt rapidly to meet local demand. Relatively low capital cost, speed and ease of construction are key advantages of our proposed modular mini-refinery project. Two 30,000 bpd units producing high octane unleaded gasoline, LPG, diesel, kerosene and fuel oil can be installed in an 18 month time window, with a budget of $200 million. Modules from 4,000 bpd up to 30,000 bpd primary distillation capacity can be added together with debottlenecking to create a refinery of 100,000 bpd or more, should demand dictate. The conditions required to make such an investment workable typically include: a location in close proximity and with access to crude supply; near to sizable markets with logistic advantages—decreases high distribution costs in remote regions; project finance on preferential terms from development credit agencies and almost certainly some government incentives to support regional development.

Vision Statement:

To develop Oil and Gas Process Plants for the elimination of domestic and regional deficits in petroleum products and Hydrocarbon derivatives

Mission Statement:

To develop an Industrial Park for the establishment of Oil and Gas conversion Plants and associated utilities through strategic alliances and profitable businesses that will participate competitively in domestic, regional and International markets.

Modular Mini-Refinery Configurations

Mini-refineries are typically available in units from 4,000 to 30,000 bpd. The different configurations available for modular mini-refineries, with increasing degree of sophistication are:

1. Atmospheric – Topping Unit A basic (low capital cost) crude distillation unit for diesel and/or kerosene production, with naphtha and fuel oil as by-products.

2. With Gasoline Train With a reformer or hydro-treater added (higher capital cost) produces high octane unleaded gasoline and LPG. This configuration can include an isomerization unit to boost total Octane rating of gasoline and produce more premium unleaded gasoline.

3. Vacuum Distillation – Cracking A second distillation tower can be added to vacuum distil the fuel oil component from the atmospheric tower into a clean heavy diesel (vacuum gas-oil) and heavy residual oil.

4. Hydrocracker Unit – Full Conversion The hydro-cracker Unit (high capital cost) is a device that converts light and heavy gas oils to more valuable lower boiling point products. The yield across a hydro-cracker may exhibit volumetric gains as high as 20-25% for light end products from fuel oil, making it a substantial contributor to refinery profitability.

Our modular mini-refinery will provide full flexibility and will be built in a phased manner, such as in the following project schedule:

Phase 1: 1st 30,000 bpd 1A- 12months – commence with one 30,000bpd modular unit with crude distillation. 1B- 18months – Add 9,000- 14,000bpd with reformer/ hydrotreater and isomerization unit.

Phase 2:  2nd 30,000 bpd Add another 30,000 bpd modular unit with crude distillation.

Phase 3: debottlenecking hydro cracker. (Depends on result) Add another modular unit and debottleneck existing units to reach 90,000- 100,000 bpd Install vacuum unit Install hydro cracker(second hand) to give additional conversion capacity.

Construction of our Modular Mini-Refinery

We in partnership with a specialist engineering firm that will offer a turnkey service for: design, engineering and procurement; plant fabrication and act as a general contractor for local construction together with supervision of commissioning and start-up. Normally they will arrange local sub-contracts for: civil works and site installation of process plant and utilities.

The Modular units are pre-fabricated in workshop conditions and will be shipped to our site for assembly. Quality and speed of construction are key advantages of this approach.

Approval and Permits

Approval for the design, construction and operation of a refinery is to be gotten from the federal ministry of petroleum resources through the Department of Petroleum Resources (DPR). The approval is in three stages: License to Establish, Approval to Construct and License to Operate.

License To Establish (LTE): This approval stage is to confirm general feasibility of the proposed project, market plan, products specification, site selection, proposed crude oil(or feedstock) supply plan and product evacuation plan, preliminary safety and environmental impact statement, and organizational plan.

Approval To Construct(APC): This stage involves the submission of the detailed engineering plan of the refinery to the Department of Petroleum Resources for review and approval and also making a comprehensive presentation of the project design to DPR.

License To Operate(LTO): Upon mechanical completion of the refinery, the refiner shall apply for the License to operate the refinery and pay the statutory fee as prescribed in the petroleum refining regulations 1974, part v, supplemental paragraph 46, or as amended in Appendix I.

Investment Opportunity

We are seeking a Bridge loan to fund the initial stage of the development of the project.

The bridge loan will be used to secure a project office in Nigeria while we obtain all necessary permits from relevant government agencies including the Department of Petroleum Resources (DPR) and ensure smooth and timely development of the project. Initially, an amount to the tune of US$ 5.4m is been sought for a period of 8-12months.

We are proposing this investment mainly to high net worth individuals with the desire to increase exposure to an attractive crude oil refinery. This opportunity is reserved to investors bringing a minimum amount of US$ 1 million. We pay finders fees to individuals or corporate bodies who partner with us by referring to us investors who invest in our Project.

Once the project is fully entitled, We will then begin the second round of financing from more conventional financing instruments that are at lower-interest, for a longer term, and in a greater amount. The second round of financing will consist of Equity and Debt financing.

A portion of the funds raised from the second round of financing will be committed to take out the bridge loan and fund completion of the project.