Page 8 - DMEA Week 05 2022

DMEA REFINING DMEA

NNPC report says Port Harcourt

rehabilitation project is behind schedule

AFRICA NIGERIAN National Petroleum Corp. (NNPC) said in the report that Tecnimont was in com-
has said that its effort to rehabilitate Port Har- pliance with the provisions of local content laws.
court Refining Co. (PHRC) is running behind The Italian contractor is actively hiring Nigerian
schedule. companies to act as sub-contractors, in line with
The local Punch daily said it had viewed a the provisions of the Nigerian Content Develop-
report from NNPC stating that cumulative pro- ment Act, it said.
gress on the project should have amounted to PHRC is comprised of a 60,000 bpd unit built
10.7% by this date. So far, though, the rehabilita- in 1965, known as Area 5, and a newer unit built
tion project is only 6.3% complete, and the gov- in 1989 which is capable of processing 150,000
ernment-owned company said in the report that bpd of crude.
it had ordered its contractor, the Italian company Tecnimont was hired on an engineering,
Tecnimont, to close the gap. procurement, construction, installation and
“[The] contractor is to issue a mitigation plan commissioning (EPCIC) contract worth nearly
to address this variance and to ensure that the $1.6bn. It has already received an advance pay-
project is completed within schedule,” the report ment of 15% of this sum, with $194mn or 70% of
said, according to Punch. the total coming in US dollars and the remain-
Tecnimont is supposed to complete the reha- ing 30% in naira, in line with the terms of its
bilitation of the 210,000 barrels per day (bpd) contract.
PHRC complex by early January of 2025, 44 The Italian company had carried out a
months after the date that its contract took effect $50mn, six-month ‘integrity check’ in 2019, with
– April 6, 2021. fellow Italian firm Eni contracted as technical
However, it has encountered a number of adviser. This work included equipment inspec-
delays as a result of worldwide supply chain tion at the site, as well as “relevant engineering
disruptions and the coronavirus (COVID-19) and planning activities”.
pandemic, including the latest outbreak of the NewsBase understands that only once work
omicron variant, according to refinery staff to rehabilitate PHRC has been completed can
cited in the NNPC report. The news casts further NNPC proceed with similar projects to revamp
doubt on the project’s ability to rehabilitate 90% facilities at Warri and Kaduna that have capaci-
of the refinery’s by the end of next year. ties of 125,000 bpd and 110,000 bpd respectively.
Additionally, it has also experienced chal- Contracts were awarded to Italy’s Saipem and
lenges as a result of problems with Nigeria’s subsidiary Saipem Contracting worth a total of
East-West Road Corridor, which has hindered $1.485bn – $898mn for Warri and $587mn for
movements to and from the refinery and caused Kaduna – in August that entail a three-phase
the loss of many project man-hours. approach to rehabilitate the refineries over 77
On a more positive note, however, NNPC months.™

P8 www. NEWSBASE .com Week 05 03•February•2022