TheCable

The Nigerian National Petroleum Corporation (NNPC) says Port Harcourt and Warri refineries have commenced preliminary production of petroleum products after successful test-runs.

Ohi Alegbe, NNPC’s group general manager, group public affairs division, attributed the progress recorded to efforts of “in-house engineers and technicians”.

Alegbe said Port Harcourt refinery was ramping up its operation to about 60 per cent of its 210,000 barrels per day name plate capacity, while Warri refinery is projecting to hit 80 per cent of its installed 125,000 bpd capacity.

“PHRC was projected to boost the nation’s local refining capacity with a product yield of five million litres of petrol per day,” he said in a statement.

“Warri refinery would contribute 3.5 million litres of petrol to local refining capacity.”

The statement explained that NNPC adopted the phased rehabilitation after the original refinery builders (ORB), who were initially contacted for the project, came up with unfavorable terms.

It explained that 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 statement read.

“The nominated partners, as sole-bidders, came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations.

“The phased rehabilitation strategy entailed phased and simultaneous rehabilitation of all refineries using in-house and locally available resources in line with the spirit and letter of the Nigerian Content Law.

“It also involved the use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation.”

The statement added that the phased rehabilitation, which started in October 2014 after the required funding stream was established, created a 70-per cent reduction in costs.

It said this had helped largely in mitigating the financing challenge of refinery rehabilitation.

It stated that with the successful re-streaming of the PHRC and WRPC, attention had moved to the 110,000 barrels per day Kaduna Refining and Petrochemicals Company (KRPC).

According to the statement, the KRPC is billed to come on stream soon.