State-run refineries due extensive upgrades in 2017, NNPC says

Nigerian National Petroleum Corp. will embark on an aggressive program to modernize and upgrade the country’s four state-owned refineries beginning in 2017 as part of a strategy to meet Nigeria’s domestic demand for refined products and reduce its reliance on foreign imports.

The comprehensive rehabilitation program will involve projects aimed at ensuring refineries operated by NNPC subsidiaries Port Harcourt Refining Co Ltd. (PHRC), Warri Refining & Petrochemcial Co. Ltd. (WRPC), and Kaduna Refining & Petrochemical Co. Ltd. (KRPC) achieve optimal capacity utilization next year, NNPC said on Dec. 20.

The proposed revamping program comes as part of the company’s determination to move away from its historical approach of quick fixes, according to Anibor Kragha, NNPC’s chief operating officer for refineries.

“Changing one fuel pump here [and] one compressor there is not helpful,” said Kragha. “What we are doing now is to step back and take a holistic approach [to fully rehabilitate] all of the refineries.”

The announcement follows a series of efforts initiated by Nigeria’s recently elected President Muhammadu Buhari to transform state-owned petroleum operations to enhance focus, accountability, competitiveness, and transparency, measures which included the early 2016 restructuring and reorganization of NNPC, as well as an invitation to private investors to become financial and technical joint-venture partners in modernization of the country’s four state-run refineries (OGJ Online, Mar. 4, 2016).

While a separate initiative proposing to relocate and colocate foreign brownfield refining installations at NNPC’s existing refining site pads to augment each refinery’s overall site capacity also remains ongoing, Kragha said no additional capacity under the program is scheduled to come on stream during 2017.

Other NNPC refining projects, however, continue to advance.

At its Port Harcourt refining complex in Rivers State—which includes a 60,000-b/sd hydroskimming refinery and 150,000-b/sd full-conversion refinery—subsidiary PHRC soon will begin production of aviation turbine fuel for Nigeria’s domestic market, according to Kragha.

KRPC also currently is working to achieve a 75% capacity utilization at its 110,000-b/sd Kaduna refinery in 2017 based on what it anticipates will be a steadier supply of crude feedstock to the manufacturing site, said Mallam Idi Mukhtar Maiha, KRPC’s managing director.

Both the Kaduna and Port Harcourt refineries, as well as WRPC’s 125,000-b/sd Warri refinery in Delta State, have experienced massive bouts of downtime as a result of feedstock interruptions caused by Nigerian militant attacks on crude pipelines supplying the processing sites (OGJ Online, Jan. 22, 2016).

While NNPC has yet to disclose complete details regarding the full scope and cost of the pending refinery modernization program, the Nigerian government in June estimated total rehabilitation works would require an investment of about $500 million.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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