Comparing Martinez Refinery With Port Harcourt Refinery Is Illogical

By Adewole Kehinde

The Federal Executive Council met on Wednesday and approved the sum of $1.5 billion for the rehabilitation of the Port Harcourt Refinery Company Ltd.

It was good news to me as that will drastically reduce or stop the importation of fuel and at the end reduces the pump price of fuel and other commodities.

Unfortunately, some people like Atiku Abubakar, Gov Nyesom Wike, Aisha Yesufu, Dino Melaye among others are opposing the rehabilitation/contract award.  

The former Vice President, Atiku Abubakar said that the $1.5 billion earmarked by the Federal Government for the renovation of the moribund Port Harcourt refinery is suspicious.

Those criticizing the rehabilitation should know that reviving and optimising the refinery was long overdue, it was better late than never.

He further said that “Shell Petroleum Development Company last year sold its Martinez Refinery in California, USA, which is of a similar size as the Port Harcourt refinery, for $1.2 billion, bearing in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery”.

I will, for clarity sake do analysis of both refinery here so as for Nigerians to know better than the misinformation been sold to them.

The Port Harcourt Refining Company Limited is in business to optimally process hydrocarbon into petroleum products for the benefit of all stakeholders. The company’s vision is to be an innovative international hydrocarbon processing company of choice.

PHRC Limited is made up of two refineries. The old refinery commissioned in 1965 with current nameplate capacity of 60,000 barrels per stream day (bpsd) and the new refinery commissioned in 1989 with an installed capacity of 150,000 bpsd. This brings the combined crude processing capacity of the Port Harcourt Refinery to 210,000 bpsd. It has five process areas – Areas 1-5. The new refinery is made up of Areas 1-4 while the old refinery is Area 5.

Area 1 is made up of the Crude Distillation Unit (CDU), where kerosene and Automotive Gas oil (AGO) are produced as finished products. Other intermediate products from CDU are Straight –Run Naphta (SRN). Straight Run Gasoline (SRG) used for PMS blend, Liquefied Petroleum Gas (LPG) and Atmospheric residue (AR). Vacuum Distillation Unit (VDU) where AR (CDU bottoms) are further processed under vacuum, or significantly less than atmospheric pressure to produce high – vallue products without cracking like vacuum gas oil (VGO) fccu feedstock and light as gas oil.

Area 2 is made up of Naphtha Hydrotreatung unit (NHU), where naphtha is hydro-desulphurised; the Catalytic Reforming Unit (CRU), responsible for upgrading naphtha to reformate which has a higher octane value for PMS blend; the Kero Hydrotreating Unit (KHU) where Kero is treated to make it acceptable for aviation use: Area 2 also has the Continuous Catalyst Regeneration Unit (CCR), which constantly reactivates the deactivated catalyst from the reformer. Other units in Area 2 include, the Hydrogen Purification, Fuel Gas Vaporizer, Sour Water Treatment and Caustic Treatment units.

Area 3 is made up of a Fluid Catalytic Cracking Unit (FCCU), where Vacuum Gas Oil (VGO) and heavy diesel oil (HDO) are cracked to obtain more valuable products, like FCC gasoline used as pms blend and Light Cycle as blend component for LPFO and LPG. Other units in Area 3 include the Gas Concentration, Gas Treating and Mercaptan Oxidation units.

Area 4 has three process units namely Dimersol, Butamer Isomerisation and Alkylation units. The units are designed to produce high octane gasoline blend component.

Area 5, which is the old refinery, is made up of the Crude Distillation Unit (CDU); the Platform Unit (CRU), the LPG Unit, as well as utilities section.

The refinery is self sufficient in power and utilities generated from the Power Plant & Utilities. There are four (4) turbo-generators each with a capacity of 14MW of electricity per hour and four (4) Boilers, capable of generating 120 tons of steam per hour each. The section also generates cooling/service water, plant/instrument air and nitrogen.

The refinery has a pool of maintenance personnel that take care of routine, programmed and emergency repairs of equipment.

There is also the Supply Chain Management Department that oversees the procurement and storage of needed spare parts and chemicals.

PHRC produces the following products: Liquefied Petroleum Gas (LPG), Premium Motor Spirit (PMS), Kerosene (aviation and domestic), Automotive Gas Oil (AGO – diesel), Low Pour Fuel Oil (LPFO) and High Pour Fuel Oil (HPFO).

PHRC produces unleaded gasoline that meets international standard.

The PHRC also has in-house firefighting capabilities.

Martinez Refinery was first built in 1913 under the name Avon Refinery, and has been continually expanded since.

Operating since 1915, Shell Oil’s Martinez Refinery is one of the world’s most complex refineries, converting as many as 165 thousand barrels of crude oil per day into automotive gasoline, diesel, jet fuel, industrial fuel oils, petroleum coke, liquefied petroleum gas, sulfur, and asphalt.

It was purchased by Tosco in 1976. By the 1990s, a history of poor maintenance and under-staffing gave the refinery a reputation for being a hazardous workplace.

Throughout the 1990s, it led the US refining industry in the number of environmental and safety code violations. These poor conditions culminated in two catastrophic accidents.

In the first, a 1997 hydrocracker explosion killed one worker. In the second of these, four workers died and a fifth was hospitalized in a 1999 naphtha explosion.

A maintenance supervisor refused to shut down the unit after corroding valves failed to stop the flow of the extremely hazardous substance.

In November 2010, the refinery had a flaring event, due to a simultaneous PG&E utility power and Foster Wheeler co-generation plant failure that produced large quantities of thick black smoke.

In February 2015, a nationwide strike resulted in the closure of the Martinez refinery, the only refinery closure resulting from the strike.

On December 15, 2015, thick smoke and flames could be seen rising up from the refinery. Due to the loss of a primary steam generation unit, flaring was done to release pressure. A Level 2 alert was issued to the community, recommending that they stay indoors.

On February 1, 2020, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell plc announced that it has formally closed on the sale of Shell’s Martinez Refinery in California to PBF Holding Company LLC (PBF), a subsidiary of PBF Energy, Inc., in exchange for $1.2 billion which includes the refinery and inventory. The deal also includes crude oil supply and product off take agreements, and other adjustments.

What people like Atiku Abubakar failed to mention is that the Martinez Refinery has been shut down more than 4 times by regulators for environmental non compliance.

The rehabilitation is a welcome development as it would create employment for the teeming jobless youth in the Niger Delta and increase the country’s refining capacity.

I am optimistic that the project when completed would reduce youth restiveness and criminality in the region.

My recommendation to the Federal Government is to swing into action immediately by releasing money to back up its approval as I expect the rehabilitation to follow the timeline.

I also called on the media as the Fourth Estate to closely monitor the execution of this project from the beginning to the end and raise alarm when they notice foul play.

It is irresponsible for an oil-producing country like Nigeria to be selling crude oil and importing refined products, so the move to rehabilitate the Port Harcourt refinery would gradually bring an end to the economic disaster.

Adewole Kehinde is the publisher of Swift Reporters and can be reached via 08166240846, 08123608662

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