Resuscitation of Port Harcourt Refinery: A Boost for Nigeria’s Petroleum Value Chain

 Bunmi Ashaju

The long awaited plans by the Federal government to fix Nigeria’s moribund refineries and make them work finally materialised on Tuesday, November 26, 2024, showing a positive sign of commitment by the administration of President Bola Ahmed Tinubu to deliver a future for the country’s petroleum industry value chain in less than two years in office.

This feat has proved that the Nigerian National Petroleum Company (NNPC) Ltd under the stewardship of its Group Chief Executive Officer, Engineer Mele Kyari, has worked the talk by fulfilling the pledge to re-stream the Port Harcourt Refining Company (PHRC), signaling the commencement of crude oil processing from the plant and the delivery of petroleum products for local consumption after several attempts of more than two decades.

According to Olufemi Soneye, the Chief Corporate Communications Officer,  CCCO, of NNPC Ltd on Tuesday, trucks have begun loading petroleum products, including Premium Motor Spirit (PMS) or petrol, Automotive Gas Oil (AGO) or diesel, and Household Kerosene (HHK) or kerosene. Other products in the slate will also be dispatched in due course. This is indeed a new dawn for Nigeria and significant milestone worthy of celebration.

Although the Warri and Kaduna refineries are still undergoing rehabilitation to attain full re-streaming capacities just like the Port Harcourt episode, however the citizenry had no option but to repose their hope in the government, having seen it demonstrate seriousness to stem the tide of hopelessness and give Nigerians its deserving succor after years of hardship, suffering, hunger and deprivation.

Speaking at a brief ceremony marking the commencement of product loading on Tuesday in Port Harcourt, the Group CEO, Mr. Mele Kyari, described the event as a monumental achievement for Nigeria, signifying a new era of energy independence and economic growth for the country.

Kyari who was feasibly excited expressed gratitude to President Bola Ahmed Tinubu for his unwavering support and commitment to the refinery’s rehabilitation project and for prioritizing energy security for the nation. He also extended deep appreciation to the NNPC Ltd Board of Directors and staff for their dedication, which culminated in the refinery’s re-streaming. Additionally, he commended the contractors for their efforts in ensuring the refinery’s delivery despite various challenges.

The GCEO equally expressed gratitude to Nigerians for their patience and legitimate expectations as the company continues work on the rehabilitation of other refineries.

Similarly, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed in his own remarks, congratulated NNPC Ltd on this milestone and assured the agency’s continued support for the completion of rehabilitation work on the remaining refineries.

The PHRC rehabilitation project, an Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) initiative, aims to restore the refinery to full functionality. The project has so far achieved over 16 million man-hours without any Loss Time Injury (LTI).

More impressive is that NNPCL’s management has patriotically ingrained itself into innovative strides, leveraging both local expertise and international partnerships to bring the refinery the refineries afloat. This collaboration has facilitated a faster and more efficient turnaround, positioning NNPCL as a model for corporate governance and operational excellence in Africa’s oil and gas industry. 

Re-streaming Port Harcourt Refinery marks the dawn of a new chapter in Nigeria’s petroleum industry. This development is a significant achievement for the NNPCL which has demonstrated a remarkable resolve to self-sufficiency in refining and national energy security. 

With the Port Harcourt Refinery now operational, Nigeria is poised to take a significant step towards greater energy independence, improved economic stability, and reduced reliance on imported petroleum products. 

Meanwhile, the Board and Management of the NNPCL, while expressing heartfelt appreciation to Nigerians for their support and excitement over the safe and successful restart of the 60,000 barrels-per-day Old Port Harcourt Refinery, however said, “We urge Nigerians to focus on the remarkable achievements being realized under the able and progressive leadership of President Bola Tinubu and to support efforts aimed at delivering more dividends to the nation. Malicious attacks on clear progress only undermine the significant strides made by NNPC Ltd and the country.

“We are, however, aware of unfounded claims by certain individuals suggesting that the refinery is not producing products. For clarity, the Old Port Harcourt Refinery is currently operating at 70% of its installed capacity, with plans to ramp up to 90%. The refinery is producing the following daily outputs: Straight-Run Gasoline (Naphtha): Blended into 1.4 million liters of Premium Motor Spirit (PMS or petrol) Kerosene: 900,000 liters Automotive Gas Oil (AGO or Diesel): 1.5 million liters Low Pour Fuel Oil (LPFO): 2.1 million liters, Liquefied Petroleum Gas (LPG): Additional volumes

“It is worth noting that the refinery incorporates crack C5, a blending component from our sister company, Indorama Petrochemicals (formerly Eleme Petrochemicals), to produce gasoline that meets required specifications. Blending is a standard practice in refineries globally, as no single unit can produce gasoline that fully complies with any country’s standards without such processes.” 

Speaking on what extent will this positive development impact the PMS space, Soneye has this to say:

“Port Harcourt Refinery and any operating refinery in Nigeria, will contribute to supply security for Nigeria and reduce the dependency on importation and the related USD needed for those imports. Refineries also contribute to technology developments and employment. 

Pricing will always be determined by market forces both inside and outside Nigeria, however, one could expect that using locally produced crude and reduction of imports reduce overall logistics costs.”

He further gave insights on supply mechanisms put in place by the corporation even as he said; “We have well-established ways of working with all market parties including IPMAN and MOMAN which will continue to apply also to any loadings from Port Harcourt. That is, there is no need to establish new ways of working, just an extension for these to our Port Harcourt location.”

In his words of assurance to Nigerians on how Warri and Kaduna would be fixed and as a next focus, Soneye stated that, “The quick fix project of WRPC Area 1 (125kbopd) is in progress and expected to start operations first and subsequently the full plant. Construction work on KRPC (110kbopd) is progressing and is expected to come on stream as well.

“Crude oil supply will be purchased from our NNPC Trading Company under sales and purchase agreement and that crude oil transportation will be via pipelines under the tariffing framework. He also sated that operations and maintenance (planned turnarounds and reliability engineering) will be outsourced to the external contractor based on a 5-year contract. Apart from that he equally assured industry players and Nigerians as a whole that planning and scheduling, commercial, supply chain and finance will be under PHRC while product evacuation/offtake will be via NNPC Retail under the purchase agreement.”

On his reactions to what guarantees can Nigerians get such that the issue of failed maintenance that plagued the refinery in the past will remain in the past he said:

“To ensure the sustainability of the historical operations of the OPHR 60kbblpd plant and the NPHR 150KBBLPD, NNPC has put in place an interim Operations and Maintenance Contract to guarantee uninterrupted operations of Area 5. As you are aware we are about to finalise the five years O&M tendering process, this will finally put us on the right path to ensure we have the best Contractor in the world working NNPC to ensure reliability and utilisation 210kbblpd refinery – this would ensure energy security to the Country.”

With no shred of doubt the success of this project further solidifies NNPCL’s pivotal role in shaping the future of Nigeria’s petroleum sector and contributes to the long-term prosperity of the country. 

The leadership of Mele Kyari and his team should be commended for their vision, persistence, and outstanding management, which have made this achievement realistic and operable.

Engineer Ashaju sent this piece from Abuja