Sources: NNPC weighing options on PH refinery as turnaround maintenance falters

Despite a stream of promises to complete the rehabilitation of the state-owned refineries, the Nigerian National Petroleum Company (NNPC) Limited is battling to conclude the turnaround maintenance at the Port Harcourt refinery, insiders have told TheCable.

The Port Harcourt Refining Company (PHRC) operates two refineries; the old plant with a capacity of 60,000 barrels per stream day (bpsd) and a new facility with an installed capacity of 150,000 bpsd — bringing the refinery’s combined crude processing capacity to 210,000 bpsd.

Since the federal executive council (FEC) approved $1.5 billion for its rehabilitation in 2021, the refinery has remained moribund despite NNPC’s repeated assurances that it would become functional.

According to insiders, efforts to commence operations at the refinery have suffered significant setbacks.

A source said the engineering, procurement, and construction contractor has been unable to fully revamp the refinery “due to obsolescence, corrosion, lack of baseline data for structural integrity verifications” and the absence of “as-built data to help engineers draw on the history of the facility”.

THE PH REFINERY AND PROMISES OF HOPE

On May 6, 2021, the NNPC commenced repairs at the plant.

After many failed delivery targets, on December 21, 2023, the NNPC said it had completed the mechanical phase of the turnaround maintenance.

Speaking at the event held to mark the milestone, Heineken Lokpobiri, minister of state for petroleum resources (oil), said production would commence after the Christmas festivities — but the plans fell flat.

In an interview with Reuters on January 4, 2024, Femi Soneye, NNPC’s spokesperson, said testing would be completed at the facility that month.

On March 15, Mele Kyari, NNPC’s group chief executive officer (GCEO), said the refinery would begin production by the end of the month. This has also not happened.

Four months later, Lokpobiri assured Nigerians that the refinery was in its final repair stage.

In the latest deadline, Kyari said the refinery would begin operations in early August.

The refinery, however, has yet to produce a drop of petrol since the NNPC chief made the promise.

‘EXPLORING OPTIONS’

Insiders close to the rehabilitation efforts said since the refinery is yet to produce petroleum products, the NNPC is considering various options to ensure that it does not remain moribund.

According to documents seen by TheCable, one of the options available to the national oil company is to retrofit the refinery into a blending plant.

An oil blending plant has no refining capability but can be used to blend re-refined oil (a used motor oil that has been treated to remove dirt, fuel, and water) with additives to create finished lubricant products. 

In a memo dated August 27, a representative of the PHRC reached out to an official at NNPC Trading Limited, an NNPC subsidiary, over the supply of petrol.

“PHRC is desirously[sic] of procuring high RON gasoline from your company to blend with Naphtha produced from our 60,000bpd refinery (Area 5 plants),” the document reads.

The PHRC representative asked the NNPC trading official to “supply to us” two cargoes of petrol with RON 94 specification.

The requested cargo size was said to be 28 kilotonnes (KT) each, and the product was to be delivered in the second week of September and the first week of October, respectively, to the Okrika Jetty in Port Harcourt.

“Due to the draft limitations at PHRC Okrika Jetty (9.2 meters) the maximum cargo size is 30KT,” the PHRC representative said in the correspondence.

However, when TheCable contacted NNPC, the national oil company denied planning to convert the refinery to a blending plant. The NNPC said a blending plant “does not align with the company’s business model”.

“Similarly, there are no plans to import off-spec RON 94 for blending. As for the PH refinery, NNPC Ltd, together with its engineers and partners, is working tirelessly to complete the commissioning of the old refinery, while rehabilitation efforts for the new refinery are still underway,” Sonenye, spokesperson of the national oil company, said.