Having tested the commercial viability of its operations with a profit of N11.2 billion in the first month of the year, Port Harcourt Refining Company (PHRC) Limited is driving massive rehabilitation programme to enhance its process efficiency, optimize crude oil value and address local fuel supply concerns.
Nigeria’s biggest refinery, Port Harcourt Refining Company (PHRC) Limited, has activated comprehensive rehabilitation project that would bring about optimal processing capacity of the plants and full yield of different petroleum products.
The rehabilitation will however be carried out in phases in a strategy that would permit operations to progress at available units of the complex while repair works continue on other processing units.
When completed, the refinery is expected to displace significant volume of petroleum products currently imported into the country, substantially cut subsidy bill on government, and also evolve a sustainable model for use of in-country capacity for maintenance of all local refineries.
Already, most of the tools, equipment and sundry spare parts required for the rehabilitation and upgrade have been successfully procured from the original equipment manufacturers while technical crew of the of the company and indigenous contractors have been fully deployed on different schedules of the job.
Newsmen who visited the refinery as part of the inquest into the prevailing fuel supply crisis witnessed intensive rehabilitation activities at the two plants in the refining complex as both contractors and technical crew of the company scurried with equipment, spare parts and tools.
Managing Director of the company, Dr. Bafred Audu Enjugu, told visiting journalists in Port Harcourt that the management of the company, with support of the parent Nigerian National Petroleum Corporation (NNPC), have used the period of crude supply glitch at the refinery to embark on rehabilitation of Area I which hosts the crude distillation unit (CDU) to pave way for simultaneous operations and upgrade of other units ahead of July when crude supply to the plant is expected to be restored.
According to the plan explained by Dr. Enjugu, Area I of the refining complex is prioritised because of process sequence while the optimization units such as the Catalytic Reformation Unit (CRU) and the Fluid Catalytic Cracking Unit (FCCU) are to be rehabilitated subsequently. The later units, he said, further process initial output of the CDU to produce premium products used for blending primary products of CDU to achieve products of high octane rating.
The 210, 000 barrel per day refinery is expected to exceed 80 percent availability by first quarter of 2016 when all the units are expected to have been fully revamped and upgraded.
It would be recalled that the contract for Turn Around Maintenance (TAM) of the refinery was planned to be handled by the original builders of the plant by the government but the JGC of Japan which built the plant could not honour the contract due to security concerns about Nigeria. It however recommended Technimont of Italy to carry out the job.
Dr. Enjugu explained that the contract could not progress when Technimont submitted outrageous charges and failed to provide performance guarantee for the job.
Pointing at the strategic economic and security importance of the refineries, Dr. Enjugu said that NNPC cannot give up on the refineries, and thus decided to mobilize its retired and active workforce as well as credible indigenous contractors with reputation of performance to take the challenge.
“The people are eager to prove that the plant can be recovered to full capacity, and I can tell you nobody knows the plant half as much as those who have spent their lifetime running it and maintaining it,” he pointed out.
On the standard of work, Dr. Enjugu said that all the technicians deployed in the work are skill certified, adding that their knowledge, experience, discipline and perseverance would be brought to bear on the job.
“On standards, I can tell you that it is more difficult not to comply than to comply,” he stressed, adding that the plants have sufficient intelligent sensors that call attention to errors, omissions and faults.
No lost time on injury is expected during the rehabilitation project, he explained, pointing out that safety experts from sister refineries of NNPC at Warri and Kaduna have been mobilised to Port Harcourt to assist during the entire period of the work.
On the values to be created by the ongoing rehabilitation of the plants, Dr. Enjugu pointed out that the strategy has afforded Nigerians the first full opportunity to handle a significant scope of refinery rehabilitation in the country, explaining that success of indigenous technicians at the job would resonate across Africa.
He also pointed out that cost saving has remained one of the greatest values so far, stressing that use of indigenous workforce has enabled the project move faster at low cost. He also pointed at the soaring level of confidence in the workers deployed in the job as well as discoveries that some of the parts could be fabricated locally right there in Port Harcourt using the same materials and standard codes as original equipment manufacturers.
Looking at what has been done so far, Dr. Enjugu declared that he is happy that the original refinery builders declined to do the job, explaining that their failure has provided the opportunity to discover that the job could indeed be locally done.
When contacted, the Executive Director in charge of Operations at the Company, Engr. V. A. Ugochukwu, explained that the refinery had concentrated on production of low value products in the past because units that optimize full value production were not available due to long period without required Turn-Around Maintenance.
He said the company’s operations and maintenance team has robust experience to bring the plants to full operations, to add maximum value to crude oil, and pump out premium products to the market.
Executive Director in charge of Services at the complex, Sir Ralph Ugwu, stated that the rehabilitation project is receiving full host community support and has seen unprecedented staff enthusiasm in tackling such an intricate and complicated challenge.
According to him, the rehabilitation work is to be carried out by indigenous workforce without compromising standards, adding that the project model would give full expression to the targets and objectives of the highly applauded Nigerian Content policy which, he explained, has been very successful in the upstream sector of the petroleum industry.
With the project, he said, PHRC would lead implementation and compliance of Nigerian Content policy in the downstream end of the industry.
When completed, Sir Ugwu said, the refinery is expected to displace significant volume of petroleum products currently imported into the country, substantially cut subsidy bill on government, and also evolve a sustainable model for use of in-country capacity for maintenance of all local refineries.
On the commercial side, he said the N11.5 billion profit declared by the company in within one month of operation in January strongly supports that the refinery would run very profitably at the end of the exercise.
Technical Director of DKG ITCC Limited, one of the local contractors involved in change-out of the Area 1 of the refinery, Mr. Oguntuberu Olusola Samuel, told newsmen that his company is confident to deliver its schedule within allocated 45 days period.
He explained that whereas his company has technical partnership with DKG of Hungary, it would deliver the job with 100 percent indigenous workers, adding that the technical and safety standards of NNPC do not give room for errors.
He explained that the terms of the contract entails that a mechanical test-run would be conducted before handing the awarded process unit to PHRC while DKG would maintain a base close to the refinery for quick response to maintenance calls.
A senior executive of DBN Limited, another local contractor engaged in the rehabilitation, Mr. Hart Lawrence, declined comments on the activities and schedules of his company, citing internal communication controls.
A worker in the company however said the company was working to deliver ahead of schedule, pointing at its tracks record of performance in maintenance of process plants operated by indigenous and multinational oil firms in the country.
“From what I know and what I am seeing, by the time all these parts are used to change out old ones, this refinery will be the newest in Africa,” he said while pleading anonymity.