Nigeria refineries

We Will Get NNPC Refineries Back, Run Them Profitably – Mele Kyari


The NNPC Group Chief Executive Officer “Mele Kyari” on Tuesday gave the assurance that the rehabilitation of the country’s refineries will soon be completed.

Kyari said these during a media briefing held at the State House in Abuja, explained that the national oil company will outsource the operations and management of the country’s refineries after the ongoing rehabilitation is completed.

He said the outsourcing of the refineries was part of the conditions given by lenders who are financing the rehabilitation of the facilities before the loan was released.

Already, Kyari said the NNPC has sealed contracts with contractors who have been hired with the objective of restoring the refineries to 100 percent of installed capacity.

He said:

“We will get the refineries back and run it as a business, we borrowed money to fix it and repayment for loans obtained is tied against the productivity of the refineries.

“Our lenders have said except you decide through a transparent process to put in place an O and M contractors otherwise we can’t lend you money.

“As we complete work on them, we will hand over to OM contractors both for Kaduna and Port Harcourt refineries. We think this is the right thing to do, many companies get OM contractors to do this around the world.”

Kyari said Nigeria will end the importation of petrol by the middle of next year based on expectations that its refineries would be back on stream and the Dangote Refinery would have been running.

The NNPC boss said in the interim, petrol would still be imported to augment the need for rising population and energy demand.

He said NNPC Ltd’s 20 percent stake in the Dangote refinery which comes with a right of first refusal to supply crude to the refinery, gives the company a competitive edge in selling its crude and extracting value from refined petrol.

The NNPC had last year secured the Federal Executive Council approval to rehabilitate the Warri and Kaduna refineries at a cost of $1.5bn ($897,678,800 for the former and $586, 902,256 for the latter) contract awarded to Italian company, Saipem.

The Port Harcourt refinery also got a $1.5bn contract awarded to another Italian firm, Maire Tecnimont SPA to fully overhaul it.
Warri and Kaduna refineries have installed output capacities of 125,000 barrels per day (bbl/d) and 110,000bbl/d respectively, while Port Harcourt has 210,000bbl/d.

As announced, their revamps which Kyari said would be a complete overhaul and rehabilitation, are in phases of 21, 23, and 33 months for Kaduna and Warri, and 18, 24 and 44 months for Port Harcourt.

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