$1.5 Billion Port Harcourt Refinery Revamp Project Kicks-off

The technical kick-off meeting of the Port Harcourt Refinery Rehabilitation Project took place today in Port Harcourt.

The event marked the commencement of site hand-over, introduction of technical teams and full mobilization to site for the project which is costing Nigeria $1.5 Billion.

The Port Harcourt project is the first phase of the revamp of the nation’s refineries as promised by the Nigerian government and the 32-year-old Port Harcourt Refinery is the first of the refineries to be rehabilitated.

The Italian contractors, Tecnimont SPA formally took over the site from the Chief Financial Officer of the Nigerian National Petroleum Corporation, NNPC, Mr. Umar Ajiya Group who represented the Managing Director, Mr. Mele Kyari.

Mele Kyari

In his message, Mr. Kyari disclosed that more than 3, 000 Nigerians would be employed during the revamp project, the first phase of which would be completed in 24 months. He stated that the country would do everything possible to refine its crude in order to discontinue the total dependence on importation of petroleum products.

The NNPC boss urged the contractors to deliver the product according to plan because Nigerians expect to see their refineries up and running as soon as possible.

The whole project to revamp the Federal Government-owned refineries will also include future works at Warri Refining & Petrochemcials Limited’s 125,000-b/sd refinery and the Kaduna Refining & Petrochemicals Limited’s 110,000-b/sd refinery.

In March this year, the Federal Executive Council presided over by President Muhammadu Buhari, who is also the Minister of Petroleum Resources, approved $1.5 billion for the rehabilitation Port Harcourt Refinery. The news of the contract sum generated much furore from different groups in and from outside the country who felt that instead of spending such a huge sum of money on revamping a 32-year-old refinery, the government might as well sell it and invest in more modern refining processes, like the modular refineries.

The contract is expected to be executed in three phases, with the second and third phases expected to be completed in 24 and 44 months respectively.

Tecnimont SPA, is regarded as an international front runner in large-scale contracting for the EPC sectors and a subsidiary of Maire Tecnimont SPA and it specializes in the transformation of natural resources, particularly plant engineering in downstream oil and gas.

As part of the contract, Tecnimont SPA will deliver engineering, procurement, and construction (EPC) activities for the full rehabilitation project, which aims to restore the complex to a minimum of 90% of its nameplate capacity.

                 Port Harcourt Refinery Complex

The Port Harcourt Refinery Complex features a 60,000-b/sd hydro skimming refinery and 150,000-b/sd full-conversion refinery. The refinery complex was shut down in March 2019 for the first phase of the repair works after it secured the service of Italy’s Maire Tecnimont to handle the scoping of the refinery complex, with oil major Eni appointed as technical adviser.

Funding arrangement for $1 Billion of the Port Harcourt project is being provided by a group led by African Export-Import Bank, (Afreximbank) and NNPC would be required to repay the loan with its share of crude produced jointly with foreign partners over a seven-year period.

Nigeria, which is Africa’s number one exporter of crude oil, has made several efforts in the past to put its four major refineries in Port Harcourt (2), Warri and Kaduna in working condition to produce petroleum products for local consumption but these efforts to turn around the refineries have failed, making the country rely almost entirely on importation, with the attendant drain on scarce foreign exchange and payment of subsidy to importers, something that has become more of a scam.

The four refineries have a combined capacity of 445,000 barrels per day (bpd), with the Port Harcourt complex accounting for a combined capacity of 210,000 barrels per day, with 110,000 b/d for Kaduna refinery and 125,000 b/d for Warri refinery.

Like Port Harcourt, Warri and Kaduna refineries have been shut down for repairs since 2019 but they are expected to operate at about 90% capacity when resume production after the revamp project by 2023, if all goes according to plan.

As we know, plans in Nigeria do not usually go as envisaged, but there is hope that this time, things might just work out ‘according to plan’.

They have to someday, don’t they?


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