NNPC refinery repairs on course

THE NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC), Nigeria’s stateowned oil company, has said its planned kickstart of rehabilitation work on...

THE NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC), Nigeria’s state-owned oil company, has said its planned kickstart of rehabilitation work on the Port Harcourt Refinery, Nigeria’s biggest refinery, by the first quarter this year (Q1 2021) was sacrosanct.

Port Harcourt Refinery, a twin refiner (PHRC 1, built in 1965 and PHRC 2, built in 1989) with a combined 210,000 barrels per day (bpd) refining capacity, is ahead of Warri and Kaduna refineries with 125,000 bpd and 110,000 bpd, respectively.

In March 2019, the refining complex was shut down for onset of a first phase repair works upon securing the services of Italy’s Maire Tecnimont to handle the rehabilitation, with oil major, Eni, appointed as a technical advisor.

Later in December 2019, the NNPC was to shut down Warri and Kaduna 2019, with the refiners pushing out sporadic operations due to years of neglect.

With PHRC, WRPC and KRPC refining plants broken-down, Nigeria, Africa’s largest crude producer, was forced to rely heavily on petroleum products importation to meets its domestic fuel needs.

Previous attempts to take up a full revamp of the oil refiners were scuttled after the NNPC failed to secure funding for the projects, which ran into billions of dollars. For example, Port Harcourt refinery alone was estimated at over $1.2 billion.

The NNPC, having concluded talks with lenders to raise $1 billion for the rehabilitation, said it is now on track with its earlier planned Q1 2021 date to undertake the complete overhaul of the nation’s four refineries, beginning with PHRC.

The successful negotiations for the funding were led by the African Exportin

Import Bank, (Afreximbank), and has now paved the way for work to move to the commercial stage of prequalifying bids submitted by local and international companies for the engineering, procurement and construction (EPC) contract award for rehabilitation of the 210,000-bpd refinery.

According to the NNPC, “talks on securing the loan, which is about $1 billion, actually began late last year (2020), and I can tell you that terms have now been agreed and ready to be disbursed.”

Nigeria has been in dire need of a revamp of its four refineries over the past few years, but it faced extreme challenges in securing the funds to execute the project, with finalizing the EPC contracts also delayed.

NNPC says, on completion of repair work, it expects PHRC to operate at around 90 per cent capacity, and to achieve full production around 2023. The rehabilitation programme is estimated to last 18-24 months, with repairs at the Warri and Kaduna plants expected to follow suit.

Industry watchers believe that the increase in output from the Port Harcourt refinery would help Nigeria curb its current reliance on fuel imports. The OPEC member imports around 1 million to 1.25 million metric tonnes of gasoline each month to meet national demand estimated at around 50 million to 60 million litres a day.