Page 4 - DMEA Week 15 2022

DMEA COMMENTARY DMEA

Nigerian refining

progress continues with

Port Harcourt update

The country’s downstream sector has had several false dawns, but the
pieces finally appear to be falling into place for Nigerian refining.

AFRICA NIGERIA is ramping up towards a refining engineering, procurement and construction
renaissance that has been decades in the making, (EPC) work to revive the refinery.
as its largest state-owned asset nears a return to The original plan was to achieve 90% of its
WHAT: action and testing continues ahead of the launch nameplate capacity by 2023, with the second and
Refining is expected of a hotly anticipated greenfield unit. third phases six and 26 months later. The Ital-
to resume at the Port State-owned Nigeria National Petroleum ian company, with compatriot supermajor Eni
Harcourt refinery within Corp. (NNPC) took its full 445,000 barrel per as technical advisor, had carried out a $50mn,
the next 12 months day (bpd) refining slate out of operation in 2019 six-month ‘integrity check’ including equipment
under the first phase for rehabilitation work, the cost of which has inspection and “relevant engineering and plan-
of its rehabilitation as drawn the public’s ire. ning activities” in 2019.
testing brings the private The issue has become highly politicised with Sylva assessed the progress in his statement:
Dangote refinery nearer the government coming under intense criticism “This project kicked off second quarter last year
to operations. for continuing to spend heavily to keep the lights and where they are now is quite impressive. It
on at its offline refineries. Meanwhile, paying sig- is on schedule. The commitment is to deliver
WHY: nificant utility bills pales somewhat in compar- 60,000 barrels per day from this refinery by the
Nigeria has sought ison to the impact of decades without carrying first quarter of next year, and, of course, we are
for years to end its out proper maintenance with the overhaul work quite happy.”
dependence on petroleum to cost nearly $3bn. In October 2021, NNPC executive director
product imports and it is for refineries and petrochemicals Mustapha
finally closing in on that Port Harcourt progress Yakubu said: “Everything has been put in place
goal. Nigerian Minister of State for Petroleum to ensure that the project is delivered hitch-free
Resources Timipre Sylva said this week that the and on schedule,” noting that the facility will
WHAT NEXT: first phase of ongoing repair work to rehabilitate return to at least 90% capacity when it resumes
Modular refineries have the Port Harcourt Refining Complex (PHRC) operation.
played an important part should be completed early next year.
in the supply chain for Following a visit to the 210,000 bpd facility, Other assets
remote communities and the minister lauded work carried out on the pro- Once work at PHRC is complete, rehabilitation
their success is leading ject to date and said that it should achieve 60,000 work will begin on NNPC’s facilities at Warri and
to more investment.. bpd by April 2023. A previous date of September Kaduna, which have capacities of 125,000 bpd
this year was tabbed for the first refined product and 110,000 bpd respectively.
deliveries, though Sylva did not mention ear- In August 2021 contracts were awarded to
ly-stage operations. Italy’s Saipem and subsidiary Saipem Contract-
PHRC comprises a 60,000 bpd unit built in ing worth a total of $1.485bn – $898mn for Warri
1965, known as Area 5, and a newer unit built in and $587mn for Kaduna – that entail a three-
1989 capable of processing 150,000 bpd of crude. phase approach to rehabilitating the refineries
It has been offline since 2019 amid reports that over 77 months.
no comprehensive turnaround maintenance
(TAM) had been carried out for as long as 40 Dangote
years. While progress at on Nigeria’s state-owned refin-
Having secured a $1bn loan from Cai- ing slate is encouraging for the sector, finalisa-
ro-based African Export-Import Bank (Afrex- tion of the long-awaited 650,000-bpd Dangote
imbank) in February 2021, the Nigerian Refinery will provide a far bigger boost.
government awarded a $1.5bn contract to Italy’s As the country’s first major privately devel-
Maire Tecnimont two months later covering the oped refinery, it is seen playing a major part in

P4 www. NEWSBASE .com Week 15 14•April•2022