24 January 2018

Nigeria: Construction of Greenfield Refineries in Kano, Kaduna to Commence Soon - Baru

The construction of Greenfield refineries will commence this year in Kano and Kaduna, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru has said.

Baru said this while briefing members of staff of the corporation on the fuel supply situation in the country during a town hall meeting Tuesday in Abuja, adding that the refineries would source their crude from Niger Republic.

He said the designs for the proposed refineries in Kano and Kaduna were ready, saying their construction would commence this year.

He said the Kaduna State Government was also championing a proposal to co-locate another refinery close to the KRPC with the intent of sourcing Nigerien crude for its operations.

On the existing refineries, Baru said NNPC is inching closer to arriving at the choice of financiers for the Port Harcourt Refining Company Limited (PHRC), Warri Refining and Petrochemical Company Limited (WRPC) and the Kaduna Refining and Petrochemical Company Limited.

The development holds the promise to boosting petroleum products supply and distribution in the Country

Dr. Baru said agreements on the potential financiers for the refineries were being fine-tuned, following which the endorsement of the NNPC Board would be affected this month.

"We are pushing towards the final selection of our financiers and we expect that when that is done, we'll get the agreements and present them to our board, meeting this month to secure their endorsement and once we have the funding, we would start the rehabilitation of the refineries towards a 90 per cent capacity utilization per stream day before the end of 2019," Dr. Baru affirmed.

He described the procedure for electing the financiers as painstaking, noting, however, that it was necessary to enable a desired closure on the subject.

Dr. Baru said the corporation was also encouraging new refining capacities to come on board, adding that there were two consortia that have indicated interest to co-locate refineries in Warri and Port Harcourt.

He said NNPC would provide whatever utility services the companies might require, such as power, processed steam, water and land, stressing that the corporation has agreed in broad terms on areas of collaboration to fast track the development.

"Am happy to inform you that progress has been made, up to the level of an acceptable detailed engineering design and we are in the process of mobilizing some of the refineries already identified for installation in Nigeria," the GMD informed.

The NNPC GMD revealed that the Ministry of Petroleum Resources and the corporation were collaborating to encourage the establishment of modular refineries in the Niger Delta area to encourage job creation.

"So far, about 35 interests for modular refineries have been declared and the Department of Petroleum Resources (DPR) has issued licenses to about 13 and I have been invited to the ground breaking ceremony of the first one in Bayelsa next month," Dr. Baru revealed.

He noted that the Federal Government and the NNPC would continue to encourage private sector initiatives that would bring in competition in the petroleum products supply and distribution network so as to guarantee energy sufficiency for the country.

Dr. Baru hinted that the corporation was also exploring other sources of energy that could substitute Premium Motor Spirit (PMS), otherwise known as petrol, in cars and motorcycles, saying the use of Compressed Natural Gas (CNG) to power vehicles in Benin City is the right step in the right direction.

He said over 3,000 vehicles were now CNG-powered in the ancient city, making them, he stated, more secured, more efficient, given that gas is a cleaner source of energy.

Encouraging the development of infrastructure such as roads, railways and waterways are other means by which NNPC plans to lessen the pressure on PMS consumption, the GMD said.

He applauded the Federal Government for approving the Abuja-Kaduna-Kano pipeline project, stating that the gesture would go a long way in supporting the NNPC's transmutation into an integrated energy company.

He said the project when completed would create the needed back bone for the Abuja's 1,350 megawatts power plant, Kaduna's 900 megawatts power plant and Kano's 1,350 megawatts power plant.

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