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NNPC’s STRATEGY TO CUT FUEL IMPORTS IN NIGERIA
Nigeria’s NNPC will rehabilitate refineries to cut fuel imports
The Nigerian National Petroleum Corporation (NNPC) have come up with a strategy to end reliance on fuel imports in Nigeria. Recently NNPC stated plans to rehabilitate its refineries; this it also said will help save the country millions of dollar on fuel imports.
Nigeria have a refining capacity of about 445,000 bpd (barrels per day) from across four (4) different refineries. The refineries are:
- Port Harcourt Refining Company (PHRC), Two (2) in Port Harcourt
- Kaduna Refining & Petrochemical Company Limited (KRPC) and
- Warri Refinery and Petrochemical Company (WRPC)
The refineries all operate very much below capacity mainly due to mismanagement and lack of investment. This has also in turn forced NNPC to import majority of the country’s fuel.
NNPC has been in several talks with different consortiums to renovate its deteriorating refineries and is considering paying for the work through offtake of refined products rather than cash. The oil company also plans to pay for the work using its own cash and then raise debt.
Emmanuel Ibe Kachikwu, Nigeria’s oil minister has previously said that government would raise US$1.2 billion to upgrade its refineries as it hopes to end reliance on fuel imports by 2019.
The Renovation Plans
This last renovation of the NNPC refineries took place 19 years ago. The 210,000 barrels per day (bpd) Port Harcourt refinery (Niger Delta) would be the first to be revamped followed by the Warri refinery (Niger Delta) and then the Kaduna refinery (North West).
Italy’s Maire Tecnimont have won a US$50 miilion contract from NNPC to tackle the Port Harcourt refinery. The contract is to carry out checks and equipment inspections for the Port Harcourt Refining Company. This will take about six months starting from end of March.
At the end of the first phase, the Port Harcourt refinery is expected to reach 60 percent capacity utilisation increasing to a minimum of 90 percent. Italy’s Eni would act as adviser for the project.