Kyari Assures Of Speedy Completion Of PH Refinery

….Allays Fears Of Shell, Others On PIB

The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, has said that the date slated for delivering the Port Harcourt, Kaduna and warri Refineries is not a political statement.

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The NNPC boss in a monitored interview on Arise TV’s ‘The Morning Show’, said against all odds, the refineries would be delivered in 40 months.

The state owned corporation had in May received the approval of the Federal Executive Council to rehabilitate Port Harcourt Refinery for $1.5bn with $1bn from Afreximbank and from $500m budgetary provisions.

An Italian company, Tecnimont SPA, will be handling the renovation. But there are doubts that the NNPC may have been political about the delivery date.

The Port Harcourt refinery’s combined crude processing capacity is 210,000 barrel per day.

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Kyari said, “On our refineries, plan is to have full rehabilitation, that is both the plant itself and the surrounding facilities to be completed in 40 months, but production starts 18 months from the day the contractor mobilises the site.

“It is not a political date, it is a technical date and we know this is practical and we know this can be done. Yes it will make political sense to deliver it during the life of this administration and I know that I have never seen this level of commitment from previous administrations.”

Fuel prices in Nigeria are becoming very expensive averaging N168.06 per litre in May according to the National Bureau of Statistics. The price is on the account of NNPC subsidy.

Nigeria has over the years relied on importation of petroleum products to service its large market leading to agitations for local  refining of petroleum products.

Kyari said, “We made a very deliberate decision that what we are doing is not turnaround maintenance.

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“We followed a process that enabled us award an EPC contract to a very renowned international Contractor in this business so that they can get this done for Port Harcourt and at the back of it, we are also going through a process to award a contract for both Kaduna and Warri in the same manner to a reputable international company.

“Overall, Kaduna and Warri will catch up with the Port Harcourt process because we have learnt from the Port Harcourt mistakes that we made.

“So that we have hastened the process, so that it will catch up and run concurrently and at the end of the day, we will deliver all of them at about the same time.

“Very soon, as the contractor has already mobilised the Port Harcourt refinery, we will do the same thing for Kaduna and Warri and concurrently as they run, you will see a situation where these refineries come up. Completion may be forty months away, but obviously production will start much earlier than that.”

He also said that the country has learnt its lessons for not adequately managing its refineries.

“We have a different perspective today,” he said adding, “We have issued the EPC contract for the Port Harcourt refinery. We have changed the entire model. The model is such that yes, the best practice is for you to get an O&M contract.

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“What this means is that you get an operation and maintenance contractor to run your refinery, not to do it yourself,” he noted.

Kyari also addressed the concerns raised by Shell over sections of the Petroleum Industry Bill that proposed a fiscal regime for gas development and domestic gas supply obligation.

The company had claimed that this would serve as disincentive for oil companies operating in the Niger Delta.

The PIB which was first presented in 2008 is currently awaiting passage by the National Assembly.

Kyari said, “I am sure that it was taken out of context in the sense that the bill they are referring to is the proposal that the Executive submitted to the 9th National Assembly which was a subject of consideration.

“From the point we submitted as executives to the National Assembly, a number of things have taken place including engaging our key stakeholders which includes what we call the Oil Producers Trade Section (OPTS).

“The OPTS includes Shell and I can tell you that I am the chairman of the technical committee, we are led by the Honourable Minister of State Petroleum Resources. I was coordinating the activities and how the structure of this bill will come up.

“I know for sure that we have engaged extensively over a 100 amendments have been made to the original bill which is essentially to ensure that those concerns are addressed, so that the fiscal environment that is available today or as soon as the National Assembly passes, will be very different from what we submitted ab initio.

“They need to wait and see if some of the understandings that we have reached were out on the table as soon as the National Assembly passes the bill.

“I can confirm that it is not what they knew and of course the engagement that we have done with our partners clearly have been taken on board. We are conscious and we are very interested in making sure that gas development becomes the focus of the bill.”

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