Page 8 - DMEA Week 33 2019
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DMEA reFining DMEA
Nigerian refinery utilisation rate drops to 5.55%
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DATA released in May by the Nigerian National Petroleum Corp. (NNPC) shows that the coun- try’s four state-owned re neries were operating at just 5.55% of their nameplate capacity.
e NNPC’s four facilities have a combined nameplate capacity of 445,000 barrels per day; the Kaduna facility can produce 110,000 bpd, Warri 125,000 bpd and the two Port Harcourt units, built roughly 25 years apart, have a joint total of 210,000 bpd.
However, the latest gures show that 5.55% was a six-month high. “ e lower operational performance recorded is attributed to the ongoing revamping of the re neries, which is expected to further enhance capacity utilisation when completed,” NNPC said.
A er years of under-investment, the ageing facilities typically run at less than 10% of capacity and a general update on operations by NNPC in January this year disclosed that that full turna- round maintenance (TAM) at the plants had not been carried out for 42 years.
is has meant that imports are relied upon to meet more than 80% of demand and NNPC added that a re ning capacity of 1.52mn bpd would be required to meet Nigerian demand by 2025.
Plans by the NNPC to repair the facilities have been regularly delayed and early in the year Abuja formally acknowledged the failure of more than two and a half years of e orts to per- suade private investors to fund the work.
in March, the rst real sign of progress came when italy’s Maire Tecnimont confirmed an announcement by NNPC the previous day that the company had been awarded a con- tract to rehabilitate the re ning facilities at Port
Harcourt.
e con rmation by each party was impor-
tant, since both the client and potential restor- ers have previously claimed separately to have reached such agreements, which were then either formally denied or simply never implemented.
e italian company explained that the con- tract involved two phases. e roughly $50mn rst stage would encompass a six-month ‘integ- rity check’ and equipment inspection at the site, as well as ‘relevant engineering and planning activities’.
Subject to completion of that work, the italian company would then carry out the EPC contract on the required rehabilitation, which was said to be designed to restore output to at least 90% of nameplate capacity.
e second phase will be ful lled in collab- oration with an unnamed ‘partner’, which was later revealed to be Japan’s JGC, which with ita- ly’s Saipem was the original builder of the larger of the two Port Harcourt re neries.
Key to Nigerian e orts to improve its down- stream sector is the private 650,000 bpd Dan- gote Re nery, which is under construction by the local Dangote Group. e facility at Lekki near Lagos is set to be Africa’s largest, and could transform the country from a fuels importer to a net exporter.
However, Dangote Group executive director Devakumar Edwin said last week that the re n- ery would not reach mechanical completion until the end of 2020, with output ramping up therea er. e latest delays came about because of issues with the nearby Apapa Port through which equipment for the facility was being transported.
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w w w . N E W S B A S E . c o m Week 33 22•August•2019
