NNPC unveils investors for Port Harcourt, Warri refineries

Anibor Kragha, chief operating officer, Refining and Petrochemical, NNPC, has unveiled the two private companies that would build the Port Harcourt and Warri refineries under the co-location initiative of the Federal Government

During a presentation at the Association of Energy Correspondents conference in Lagos, last week, Kragha said that LRRI Energy, an American based company will build a 117,000 barrels per day refinery near the existing Warri refinery, while a different company identified as Jalemba Group, will build a 100,000 bpd refinery near the present Port Harcourt refinery.

The NNPC Refinery boss did not give further details about the companies before departing the conference. However an internet search conducted by BusinessDay revealed that Jalemba Group, a South African based company is involved in downstream operations. It is not clear if this is the same company that secured the bid..

Kragha  said, “The reality of the situation is that studies have been done and by 2025, the actual projected petrol consumption in Nigeria is estimated to be about 41 million litres per day. Now, the three refineries at full capacity will deliver about 50 per cent of that. Dangote refinery, I understand, will deliver about 95 per cent of that when it comes on stream.

“That is where the whole idea of becoming a net exporter of petrol is coming from – if the three refineries operate at full capacity and Dangote also comes on stream,” Kragha said.

The co-location arrangement, introduced by Ibe Kachikwu, minister of State for Petroleum Resources, seeks to ensure that new refineries are set up to share infrastructure with the nation’s existing refineries in Port Harcourt, Kaduna and Warri, as part of measures to ramp up local refining capacity.

Kragha further said the NNPC was searching for financiers with technical expertise to rehabilitate the existing refineries within the next 24 months.

“On the co-location, a 100,000-barrel per day refinery will be co-located in Port Harcourt Refinery; there is also a 117,000 barrel per day in Warri,” he added

Also speaking at the conference, Ibe Kachikwu, who was represented by a Deputy Director in charge of Engineering Standards at the Department of Petroleum Resources (DPR), Olumide Adeleke, said that the federal government was working out modalities to provide funding to promoters of modular refineries.

He identified funding as the major challenge that has hindered the take-off of the construction of the new refineries.

“On the concept of co-location of refineries, we have moved from our initial model, which involved co-locating brownfield refineries with the existing refineries to the co-location of brand new (greenfield) refineries.

“The overall concept remains the same – pipelines, jetties, and where possible, storage tanks would be jointly invested in and shared,” Kachikwu added.

Kachikwu further said that to become net exporters of petroleum products, the existing refineries needed to operate at nameplate capacity and all private and modular refineries must contribute their quota.

 

ISAAC ANYAOGU

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