Nigeria National Petroleum Corporation Makes Good Its Promise To Re-Float Port Harcourt And Warri Refineries Before The End Of July
The intractable fuels supply crisis in the domestic fuel market might see enduring resolution with the return of the two of the nation’s three refineries to production after a successful rehabilitation.
Rehabilitation work on the refineries started in 2011. The development comes as the System 2B pipeline which is crucial for production distribution in the Western axis of the country has been restored after vandals broke the pipes to steal fuel.
Nigerian National Petroleum Corporation (NNPC) declared yesterday that the Port Harcourt Refining Company (PHRC) Limited and sister Warri Refinery and Petrochemical Company (WRPC) have started preliminary operations after separate but simultaneous rehabilitation programme.
The two companies are part of the refining and petrochemical units of NNPC. No mention was made of the corporation’s third refining firm, Kaduna Refining and Petrochemical Company (KRPC) in the re-stream process.
When fully operational, Port Harcourt and Warri refineries are to produce 8.5 million liters of petrol per day, a volume expected to substantially address the scarcity and cost of transportation fuel in the country.
Group General Manager in charge of Public Affairs at NNPC, Mr. Ohi Alegbe, stated that the two refineries were re-streamed after a nine-month phased rehabilitation exercise conducted by the corporation’s in-house engineers and technicians.
He said both plants have commenced preliminary production of petroleum products after successful test-runs, noting that while PHRC is ramping up its operation to about 60 percent of its 210, 000 barrels per day (bpd) capacity, WRPC production is projected to hit 80 percent of its installed 125, 000 bpd capacity.
Mr. Alegbe stated that whereas Port Harcourt Refinery is projected to boost fuel supply with five million litres of petrol per day, Warri Refinery would contribute 3.5 million litres. NNPC had adopted the phased rehabilitation strategy after the Original Refinery Builders (ORB) who were initially contacted for the project came up with unfavorable terms.
“Though a decision was taken in 2011 to rehabilitate all the refineries using the ORB of each of the refineries, we were impelled to switch strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavorable terms’’.
The NNPC stated that the nominated partners, as sole-bidders, came up with huge financial bids after two years of thorough and exhaustive scope of work definition and price negotiations, adding that the proxies were also unwilling to provide post re
habilitation performance guarantees.
“The phased rehabilitation strategy which entailed phased and simultaneous rehabilitation of all the refineries using in-house and locally available resources in line with the spirit and letter of the Nigerian Content Law, also involved the use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation’’.
Mr. Alegbe said the phased rehabilitation programme which started in October 2014 after the required funding stream was established created a 70 percent reduction in costs which helped largely in mitigating the financing challenges of refinery rehabilitation.
The Corporation said that with the successful re-streaming of the PHRC and WRPC attention has now moved to the 110,000 bpd Kaduna Refining and Petrochemicals Company which is billed to come on stream soon.
In a related development, NNPC has disclosed that it has successfully recovered the System 2B Pipeline which was breached last week at Arepo, Ogun State.
The corporation stated that its team of engineers who were deployed to the scene of the incident was able to access the pipeline after the fire was put out and commenced repair work immediately.
“We wish to announce that the vital System 2B Pipeline which was breached at Arepo last week has been fixed and brought back on stream. Pumping of products through the system commenced on Monday upon successful completion of repair work over the weekend. “We also wish to call on all those engaged in the criminal acts of pipeline sabotage and oil theft to desist in order to avoid such horrendous deaths as was witnessed in the recent incident.”