The Nigerian National Petroleum Corporation (NNPC), Nigeria’s state oil firm, has announced that it plans to rehabilitate its refineries to help the country save billions of dollars on fuel imports. The company has hired Italy’s Maire Tecnimont to tackle the Port Harcourt plant.
Nigeria has 445,000 bpd of refining capacity across four separate facilities which operate well below capacity due to mismanagement and lack of investment, forcing the NNPC to import the bulk of the country’s gasoline.
Maire Tecnimont said separately it had won a contract from NNPC worth about $50 million to carry out checks and equipment inspections for Port Harcourt in the Niger Delta. NNPC noted that the work would last for six months starting from end of March.
The state-owned firm also revealed that the overhaul of the 210,000 barrels per day (bpd) Port Harcourt refinery would be the first since the last revamp was carried out 19 years ago. The company said Nigeria’s effort to ensure local sufficiency in refined petroleum products would be bolstered by the first phase of the rehabilitation of the Port Harcourt Refinery complex.
NNPC has been in talks with different consortiums to revamp its dilapidated refineries and has considered paying for the work via offtake of refined products rather than cash. The oil firm said it would use its own cash to pay for the work and then raise debt. The Port Harcourt overhaul would be followed by the Warri refinery, which is also in the Niger Delta, and the refinery at Kaduna in the north west of the country.
The company said the Port Harcourt refinery should reach 60 percent capacity utilisation at the end of the first phase, increasing to a minimum of 90 percent. it was revealed that Italy’s Eni would act as adviser.
Oil minister Emmanuele Ibe Kachikwu has previously said the government would raise $1.2 billion to upgrade its refineries and would end reliance on imports by 2019.