Port Harcourt, Warri refineries begin production

Port Harcourt refineriesSUPPLY from local refineries have received a major boost as the Port Harcourt and Warri refineries have begun preliminary production following a successful re-streaming after a nine-month phased rehabilitation exercise conducted by its in-house engineers and technicians.

The Nigerian National Petroleum Corporation (NNPC) in a statement yesterday in Abuja said that both plants have commenced preliminary production of petroleum products after successful test-runs, noting that while Port Harcourt Refinery Company PHRC, is ramping up its operation to about 60 percent of its 210, 000 barrels per day name plate capacity, Warri Refinery Petroleum Company WRPC, production is projected to hit 80 percent of its installed 125, 000 bpd capacity.

Meanwhile, the Department of Petroleum Resources (DPR) has closed down 22 filling stations in Abuja and environs for undue profiteering. 19 of them were sealed for selling above N87.00 per litre, while two were shut down for diversion of petroleum products and one was caught grossly under-dispensing and selling products massively in jerry cans.
DPR stated that the stations would remain sealed for at least one month in addition to forfeiting their bridging claims as directed by the Federal Government.

NNPC added that the Port Harcourt Refinery is projected to boost the nation’s local refining capacity with a product yield of 5million litres of petrol per day while WRPC would contribute 3.5 million litres of petrol to local refining capacity.

Providing insight into the rehabilitation exercise, the NNPC noted that it had to adopt the phased rehabilitation strategy after the Original Refinery Builders (ORB) who were initially contacted for the project came up with unfavorable terms.

“Though a decision was taken in 2011 to rehabilitate all the refineries using the ORB of each of the refineries, we were impelled to switch strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavorable terms,” the statement added.

The NNPC stated that the nominated partners, as sole-bidders came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations. The proxies were also unwilling to provide post rehabilitation performance guarantees.

It said: “The phased rehabilitation strategy which entailed phased and simultaneous rehabilitation of all the refineries using in-house and locally available resources in line with the spirit and letter of the Nigerian Content Law, also involved the use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation.”

The Corporation informed that the phased rehabilitation programme, which started in October 2014 after the required funding stream was established created a 70 percent reduction in costs, which helped largely in mitigating the financing challenges of refinery rehabilitation.
The Corporation said that with the successful re-streaming of the PHRC and WRPC attention has now moved to the 110, 000 barrels per day Kaduna Refining and Petrochemicals Company which is billed to come on stream soon.

In a related development, NNPC has disclosed that it has successfully recovered the System 2B Pipeline, which was breached last week at Arepo, Ogun State.

The Corporation stated that its team of engineers who were deployed to the scene of the incident was able to access the pipeline after the fire was put out and commenced repair work immediately.

“We wish to announce that the vital System 2B Pipeline which was breached at Arepo last week has been fixed and brought back on stream. Pumping of products through the system commenced on Monday upon successful completion of repair work over the weekend.

“We also wish to call on all those engaged in the criminal acts of pipeline sabotage and oil theft to desist in order to avoid such horrendous deaths as was witnessed in the recent incident.”

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  • Concerned Nigerian

    Diversion, under-dispensing, profiteering and so on occur due to scarcity. Sealing stations is not the solution. The solution is to make petroleum products available in the required quantity.

    • Black heart

      One could argue that diversion and under-dispensing are tools profiteers use to create a fake scarcity so they can charge more for the product.

      • Concerned Nigerian

        Not if there is sufficient supply. If there is sufficient supply it will be grossly unprofitable to create scarcity as all marketers will be on their business wit to sell their stocks.

        • Black heart

          I expect it’s hard to determine what “sufficient supply” is in the context of Nigeria where statistics are hardly accurate and are very often slanted to feed corruption. Do we know what a realistic amount of supply to the Nigerian market would be? I am sure I read somewhere a while back that marketers are apt to transport petroleum products meant for the Nigerian market to neighbouring African countries if they can make more profit. It makes more sense to attempt to plug all loopholes whilst determining some realistic figures before releasing more product into the market, otherwise we just continue feeding the corruption juggernaut that has almost brought the country to its knees.

  • amador kester

    As they go full blast with a cushioning effect on retail fuel prices then the fuel subsidy can go for good and the funds channelled to entrench a transformative and meaningful social charter for the people in housing,health,education,agriculture,micro- industrial credit and rural transformatiin

  • Joseph

    Bad People around GEJ messed him up from achieving this honour before the end of his tenure

    • Dave

      Which honour? When he was busy patronizing a cabal. Even if he stays in office for a hundred years, the refinery would not work. It was never intended to work so that the cabal will continue to make their money.

  • emmanuel kalu

    The regulators needs to show more effort in ensuring that marketers are not gaming the system. we can end this madness by deregulating and removing subsidy.