Kyari: Port Harcourt Refinery to be Completed by March 2023

Udora Orizu in Abuja

The Group Managing Director of Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari, yesterday, assured Nigerians of its resolve to complete the ongoing rehabilitation of Port Harcourt Refinery by March, 2023.

Kyari gave the assurance during the resumed investigative hearing into the state of the refineries in the country, held by the House of Ad-hoc Committee chaired by Hon. Ganiyu Johnson.

According to him, the contract which kick-started on the 6th May, 2021 had attained 30 per cent completion level overall, with the target of March, 2023 while part of it would be delivered within 32 months and the entire project is expected to be completed within 42 months.

He however maintained that the contracts for the rehabilitation of Warri and Kaduna Refineries had not been awarded, thereby debunking the fake news.

Kyari, who was represented by the General Manager, Refineries and Petrochemicals, Mustapha Yakubu, affirmed that the contract for the survey of the refineries followed due process.

However there was a mild drama on the cost of new 150,000 barrels per day Refinery.

While responding to a series of questions on the rehabilitation contract, representative of Sapien Engineering Company which got the contract of $135 million for the comprehensive technical survey of Port Harcourt Refineries, adding that an additional sum of £2.3 million was approved for the inspection of both Warri and Kaduna Refineries.

Consequently, the Committee requested for FEC approval of the $1.5 billion for Port Harcourt Refinery, approval of various expenditures incurred on the 26th July, 2017 worth $5.321 million for comprehensive technical plants as well as another $55 million paid on the same day.

The lawmakers however expressed dismay over the response of the Sapien representative who expressed ignorance over the subject matter.

After perusing through the documents submitted by NNPC to the Committee, the lawmakers also observed that similar contracts for the three refineries were awarded to another company (Technomont) in 2019.

While the NNPC Group Managing Director who spoke through the Managing Director of Port Harcourt Refinery, Ahmed Dikko, disclosed that the full conversion plant will cost $4.5 billion and be completed within five years, the lawmakers however observed that the project would cost $90 million in America.

According to him, Sapien handling the contract for the $1.5 billion rehabilitation contract issued a $300 million bond guarantee, a development which the lawmakers queried, hence requested for relevant documents.

The representatives of the NNPC helmsman affirmed that the contract was awarded to an Italian company – (Technomont) at the sum of $1,299,598 and completed the procurement as lump sum contract, in addition to the sum of $99 million VAT and $162 million for other works.

The lawmakers also alleged that the contract was awarded to Sapien without further due diligence adding that the contract was not subjected to competitive bidding.

He however noted that the Kaduna Refinery cannot receive crude oil as a result of the damaged petroleum pipelines spanning 610 kilometers from Warri, Delta State.

When asked to give details of the actual amount spent on Turn Around Maintenance (TAM) on the refineries over the past 10 years, the NNPC representatives could not give a precise amount spent.

He stated that the last Turn Around Maintenance on Port Harcourt Refinery was done in 2000, adding that up till 2018 the Refinery was not operating optimally hence shut down deliberately for the purpose of the ongoing rehabilitation.

When asked about the value of the Port Harcourt Refinery, the NNPC Group Managing Director said: “I cannot say exactly but it’s in billions.”

o this end, the Committee resolved to summon the contractor handling the Port Harcourt Refinery rehabilitation for the purpose of fair hearing.

The lawmakers also directed NNPC Management to recourse back to the Committee before awarding the contract for the rehabilitation of Warri and Kaduna, since the pipelines are in bad shape.

On his part, Hon. Dachung Bagos queried the rationale behind the £2.3 million expended on survey of Kaduna and Warri Refineries when the pipelines are in bad shape.

In his submission, Hon. Johnson Oghuma recommended that both Kaduna and Warri Refineries should be scrapped with a view to save the nation because they are drain pipes.

The lawmakers also queried the sum of $18 million expended by NNPC as well as additional sum of $50 million above the approval limits, alleging that such development amounted to contract splitting.

To this end, the Committee demanded for details of the $18 million expenditure, $50 million expended on the same day as well as $1.5 billion approved for the Port Harcourt Refinery.