August 13, 2022

Port Harcourt Refinery To Be Completed By March 2023 – NNPC

3 min read

The Nigerian National Petroleum Company (NNPC) Limited has reiterated its resolve to complete the ongoing rehabilitation of the Port Harcourt Refinery by March 2023.

The NNPC Group Managing Director, Mele Kyari gave the assurance to Nigerians, said that the contract which kick-started on the 6th May 2021 has attained a 30 percent completion level overall, and is expected to be fully completed by April 2023; he added that a part of the refinery would be delivered within 32 months, while the entire project is expected to be completed within 42 months.

Kyari who was represented by the General Manager, Refineries & Petrochemicals, Mustapha Yakubu affirmed that the contract for the survey of the refineries followed due process.

He, however, maintained that the contracts for the rehabilitation of Warri and Kaduna Refineries have not been awarded, thereby debunking the false information.

But a mild drama ensued on the cost of the new refinery with a capacity to produce about 150,000 barrels per day.

Present was Saipem Engineering who was absent at the last hearing. Responding to a series of questions on the rehabilitation contract, Walter Peviana, Managing Director, Sapien Engineering Company, which got the contract of $135 million for the comprehensive technical survey of Port Harcourt Refineries 1in 2017, said that an additional sum of £2.3 million was approved for the inspection of both Warri and Kaduna Refineries.

To this end, the Committee requested FEC approval of the $1.5 billion for Port Harcourt Refinery, approval of various expenditures incurred on the 26th July 2017 worth $5.321 million for comprehensive technical plants as well as another $55 million paid on the same day.

The lawmakers however expressed worry over the response of the Sapiem representative who expressed ignorance over the subject matter.

After perusing the documents submitted by NNPC to the Committee, the lawmakers also observed that similar contracts for the three refineries were awarded to another company (Technomont) in 2019.

Giving more explanations, the Managing Director of Port Harcourt Refinery, Ahmed Dikko, disclosed that the full conversion plant will cost $4.5 billion and will be completed within five years, but the lawmakers however said that the project would cost $90 million in America.

According to him, Sapiem handling the contract for the $1.5 billion rehabilitation contract issued a $300 million bond guarantee, a development which the lawmakers queried, and requested relevant documents.

The representatives of the NNPC helmsman affirmed that the contract was awarded to an Italian company – (Technomont) at the sum of $1,299,598 and completed the procurement as a lump sum contract, in addition to the sum of $99 million VAT and $162 million for other works.

The lawmakers also alleged that the contract was awarded to Sapien without due diligence; adding that the contract was not subjected to competitive bidding.

Yakubu however noted that the Kaduna Refinery cannot receive crude oil as a result of the damaged petroleum pipelines spanning 610 kilometers from Warri, Delta State, he also expressed concerns over the cost of constructing new pipelines. Which he said was the reason they are yet to award them the contracts for Kaduna and Warri refineries.

When asked to give details of the actual amount spent on Turn Around Maintenance (TAM) on the refineries over the past 10 years, the NNPC representatives could not give a precise amount spent.

He stated that the last Turn Around Maintenance on Port Harcourt Refinery was done in 2000, adding that up till 2018 the Refinery was not operating optimally hence its shutdown deliberately for the ongoing rehabilitation.

When asked about the value of the Port Harcourt Refinery, the NNPC Group Managing Director said: “I cannot say exactly but it is in billions.”

To this end, the Committee resolved to summon the Tecnimont, the contractor handling the Port Harcourt Refinery rehabilitation for a fair hearing.

The lawmakers also directed the management of NNPC to recourse back to the Committee before awarding the contract for the rehabilitation of Warri and Kaduna, since the pipelines are in bad shape.

Worried by the huge public funds expended on the refineries for several years without commensurate results, Hon. Isiaka Ibrahim who presided over the session in an acting capacity proposed that the refineries should be turned into the workshop.

On his part, Hon. Dachung Bagos queried the rationale behind the £2.3 million expended on a survey of Kaduna and Warri Refineries when the pipelines are in bad shape.

In his submission, Hon. Johnson Oghuma recommended that both Kaduna and Warri Refineries should be scrapped to save the nation more expenses, according to him they are drain pipes.

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