Page 5 - DMEA Week 21 2021

DMEA COMMENTARY DMEA

“Of course, there are costs associated with managing director of the Port Harcourt Refinery,
idle refineries; we have staff salaries and remu- Ahmed Dikko, and Davide Pellizola, vice-presi-
neration and then the power plant utility oper- dent of Tecnimont sub-Saharan Africa.
ations. And also we need to maintain the plants Tecnimont will carry out the work in three
in terms of preservation and lost investments phases, with the first phase to bring the unit back
because they are assets that we believe can be to 90% nameplate capacity within 18 months,
brought to life,” he said. the second to be completed within 24 months
The Port Harcourt complex is comprised of and the final stage within 44 months.
two units, built roughly 25 years apart, with joint The Italian firm was awarded a contract in
total capacity of 210,000 bpd, making it Nige- March 2019 for a two-phase programme, with
ria’s largest refinery, while Kaduna and Warri fellow Italian firm Eni contracted as technical
have capacities of 110,000 bpd and 125,000 bpd adviser. The roughly $50mn first stage included
respectively. a six-month ‘integrity check’ and equipment
The scope of work will include short and inspection at the site, as well as ‘relevant engi-
long-term production and operations plan- neering and planning activities’.
ning, production and operations execution, At the time, the second phase was to be ful-
monitoring, and reporting and optimisation of filled in collaboration with an unnamed ‘partner’,
operations. which was later revealed to be Japan’s JGC, which
This will involve process and control engi- with Italy’s Saipem was the original builder of the
neering, quality control, quality assurance and larger of the two Port Harcourt units.
laboratory, environmental management and
planning and execution for long-awaited TAM. Smaller units
To take part in the bidding process, inter- Yakubu also noted NNPC’s interest in partnering
ested parties are expected to have relevant main- with developers of smaller refineries, including
tenance experience in Nigeria or elsewhere in African Refinery in Port Harcourt’s co-location
Africa and are required to provide examples of facility at Port Harcourt, China National Chem-
O&M work carried out on at least three exam- ical Engineering Group (CNCEC) and Walter-
ples of engineering, procurement and construc- smith Petroman in addition to Azikel, with the
tion (EPC) work in refining, gas processing and latter being modular units.
LNG. Little had been heard of Nigeria’s plans for
Prospective bidders will also be expected co-location for several years.
to produce audited accounts for the previous NNPC announced plans in August 2018 for
four years, demonstrating a minimum average private-sector investors to acquire two exist-
annual turnover of $2bn. ing disused refineries from overseas, each with
They must also illustrate compliance with the capacity of around 100,000 bpd, and relocate
local content act, the provisions of the Industrial them close to the ageing state plants at Port Har-
Training Fund (ITF) amendment act of 2011, the court and Warri.
Nigeria Social Insurance Trust Fund (NSITF) act Later that year, it was announced that the
and the PENCOM Reform Act 2004. investors – a consortium comprising the local
Yakubu said that expressions of interest JIL Engineering & Oil Services Ltd and Amber
(EoIs) had already been submitted, with many Energji Makina Logistics Ltd – had acquired a
companies already having been evaluated, and refinery from BP and was in storage at Fama-
expressed optimism that NNPC would choose gusta in northern Cyprus.
the best and most appropriate contractor for the The unit operated at Mersin in Turkey until
role. 2004 and was planned to be re-located to the
In April, NNPC signed an EPC contract with Port Harcourt complex.
Italy’s Tecnimont for the overhaul of the Port All of this activity points to Abuja finally tak-
Harcourt complex. ing a new approach to refining, following many
The $1.5bn contract was signed by NNPC’s years without success.™

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