03 August 2015, Kaduna – A billow of fire and thick fumes of burnt hydrocarbons to Kaduna residents is the signal that the Kaduna Refinery and Petrochemical Company, KRPC, is in operation.
This is accompanied by a flurry of activities, especially heavy traffic of petrol tankers, in and around the 1.2 square mile refinery, which is unarguably the biggest government investment north of the Niger and the Benue. But, in the past 10 months, the fire has disappeared and the hustling around the refinery has also whittled down into a sober, low-level activity. Sunday Vanguard then decided to find out what is going on.
The Managing Director, MD of the facility, Engr Saidu Mohammed, a 1980 graduate of chemical engineering of Ahmadu Bello University, Zaria, laughed heartily from behind his table in his cosy office at the plant last Wednesday at the notion of the disappeared fire as a sign of lack of production, when Sunday Vanguard wanted to sieve out rumours from reality.
“Don’t worry that you don’t see the usual fire billowing out smoke which makes people know that we are producing, for now, we are steaming and that is what is most important”, he said.
He continued: “Tell you what?. That fire in itself requires gas, since it is gas we usually flare. But we cannot afford to waste it at this stage, because it is the same gas that we need to burn the heaters, to fire the heaters. So is it the same gas that you want to take and go and flare? If you have problem with the heaters, what happens? So the time will come when you see the fire again”.
Mohammed then went on to say that the KRPC was going through a radical overhaul of the refinery using Nigerian engineers only, and that the refinery was still producing. It turned out to be a very revealing encounter as he gave a narration of the ongoing effort to reposition the KRPC to optimal state.
TAM-Rehab, instead of shutdown
Said Mohammed: “We are doing TAM (Turn Around Maintenance)-Rehabilitation (TAM-Rehab) while the refinery continues to run. We try as much as possible not to shut down the entire refinery while this is going on. The whole essence is to say, “Look, the TAM that you have neglected for a while we are doing it; at the same time those equipment that have been troublesome, that need complete rehabilitation, we will make procurement orders for them and fix them.
“As the parts come, we rehabilitate; as the new ones come, we install. So that is the concept of TAM-Rehab.
“And we say we are going to earmark a period of 18 months beginning from October last year for the TAM-Rehab. So, invariably, by March next year, we should conclude the work.
“Not only did we give ourselves a time frame, we said we would do all we can to take the refinery from the present operating level of 60% to as high as 90%. In fact, even now, nothing stops us from pushing it to 80%, but can that be sustained, the answer is No!.
“For example, some compressors may fail; some pumps may fail. That is why we need to change such equipments. And once we change them, we would have improved, remarkably, the reliability of the refinery, then we can safely push the capacity.
“As a matter of fact, we can push it higher than 80% before now, but then we would be doing it just to test, but we cannot sustain that.
To hit 90% capacity next March
“But we can reliably sustain 60% operating level with all other things available. So the essence of this TAM-Rehab is to bring back the refinery to an acceptable level of performance, and we are looking at a utilisation level of 80 to 90%. Next, we want to make sure that we can sustain that level of performance by continuing going back to regular planned maintenance, including the TAM, again.
“Now, on the mini TAM, we have almost completed it, but we did not make noise about it. We call it mini TAM, because we are doing it in phases. Under the fuel section, the crude distillation unit, the Naphtha hydrating unit, the FCC, the basic four components of the fuel section – there is no heat exchanger that we have not fixed, cleaned and rebundled- or replaced.
“There is no column that we have not opened; where there are cases of damage, we have replaced or repaired them. There are no pumps that have not been fixed, and there are no compressors that have not been fixed. TAM is just like checking the engine of your car, repairing and fixing things that are bad. In fact, we have gone very far.
“We have finished two of the four phases. The other phases belong to the other section of the refinery, which, for now, are not a priority because it has to do with foreign crude to run that section. But the ones that are supposed to produce Liquid Petroleum Gas, LPG, gasoline, kerosene, diesel and fuel oil, all these are what we now concentrating on.
“ If you go into the plant now, you will see that we are steaming up. Forget about the fire from flaring, I know that is what people want to see. When we want, we can let that come out. The fluid distillation unit and the power plant are fully back.
How a refinery works
“Ok, let me put it this way: A refinery is not like a car that you put on your ignition and its starts, ready to move, No! For a refinery, you first of all get your power plant ready. And you don’t have your power plant until you have your boilers. You get your boilers stabilised; they are now directing enough steam, then you put the steam into generators that will bring out electricity.
When you have electricity now, you start running other utilities. You start producing your compressed air; you start producing nitrogen, because you need nitrogen to blanket everything, because, as you know, nitrogen does not burn. No refinery can run without nitrogen. And every refinery has its own nitrogen plant.
Now, you push the nitrogen into every reactor, every column; every heater, so that when you are now . . . (not clear) what will now follow behind, in fact we say, ‘you have ignited the system’, nothing will burn again, because nitrogen cannot burn. Then you start introducing your hydrocarbons. Then you start lighting the heaters, then the columns will now start picking temperature, then you charge-in the crude, then you start boiling the crude, then you start . . . you see, so it’s not like your car that you just put in the key and start.
Using available crude to produce
“Now because of the level of Turn Around Maintenance that we have done and the overhaul, this will now allow us to use the little amount of crude we have to run. That will now allow us to know the level of reliability, and will show us areas that we need to pay attention to. The strategy is just like pay-as-you-go. We put crude and the plants run. If you go into the plant now, you see another section where the contractors are very busy. Go to the fluid catalytic units, FCCs, the contractors are very busy.
Epileptic crude supply from Warri
“Part of our problem is the epileptic supply of crude. Until something drastic is done in terms of security, Kaduna refinery will continue to have that problem. Because, as we speak now, we have crude oil sitting down in Warri. It is meant for us, but it cannot be pumped to us. The pipelines have been breached, so many sections have been tampered with. What we are doing now is to use water to flush the residual crude up to here.
As we put water from Warri, the residual crude now starts moving. The water now will flow out to show you areas that have been vandalised and water does not pollute any environment. You know that is the job of the PPMC, and I understand that it will take them about four weeks to finish that. Meanwhile, we are restarting the refinery with the crude oil that we have now, awaiting the one that is being pushed, so that we don’t remain idle.
TAM done strictly by Nigerian engineers
“What we are doing, we are using purely Nigerian contractors. Nigerian engineering contractors are very competent; sadly many people don’t know that. They have the competence and the capacity to do jobs. They can do everything on this refinery. The contractors working around the technically complex FCCs are Nigerian contractors.
Original equipment makers only
“But then, on the spare-parts that are needed, what we doing is to use the original equipment manufacturers of the refinery. They find parts, they find the value, they give us performance invoice , we agree on the price, then we open a letter of credit, LC, for them. So, now, we are sure of the source and quality of the parts that are coming. Then the Nigerian agent will be responsible for clearing them, and bringing them to the refinery. And where installation is required, he will now be the go-between the Nigerian contractor and the manufacturer – assuming the contractor does not have the competence. And as you know, there is no single manufacturer for all the refinery equipment; it is just like buying a car, there are many makers of different parts for the car. So, we have many manufacturers involved.
How TAM became a problem
“Let me tell you about this place. This place was commissioned in 1980. In 1982, there was TAM; two years later, there was TAM; in 1986, there was TAM; in 1989, there was TAM. You may not have known that, because it was routine, and not a big deal. TAM started becoming an issue when the demand on NNPC changed. You said, ‘Well, NNPC, we can no longer subsidise your crude’. Because all the TAMs were done when crude oil to the refineries were subsidised. That meant we had money to do our maintenance. But, you now start telling NNPC to pay for every barrel at international price. Meanwhile, certain costs along the chain are not even being captured. For example, nobody gives NNPC money for transporting the crude from Escravos to Warri and then to Kaduna; or even evacuating the products from here to depots. All these are not factored into the final price of the product. It is not even captured on the template of the PPPRA. NNPC had to source for money elsewhere and provide this service.
“What we are trying to model after this is to say, ‘ok, going forward, there have to be some governance issues that need to be addressed to ensure that the refineries don’t go back to the state they were”.
“We are addressing the technical aspects of the plants, making sure they efficiently run at full capacity, but then governance issues have to be looked into: Crude oil supply must be regular. What we are advocating is a kind of small autonomy for the refineries so the management of a refinery will be charged with the entire chain management. Today, you have a refinery sitting down, waiting for a third party to supply crude oil. It is waiting for that third party to evacuate products, incurring cost that are not captured. We should have refineries that operate at least at a reasonable commercial level to be able to sustain their plants, maintenance including TAM. So that refineries don’t have to go to government all the time looking for money.
Treat pipelines like military zones, like the US does
“Again, we must take strategic assets with real strategic assets. What I am saying is that refineries and related assets must be seen as military zones, and given the desired security. For example, we just scratch the surface when it comes to the security of our pipelines. In the US, major trunk lines carrying gas or liquids are military zones. You tamper with it they take you on immediately. You can’t tamper with their pipelines and go free. They have a combination of human resource and technology. The pipelines are constantly monitored. You touch it, you are seen and there is immediate intervention from any direction and you may be killed immediately, because you are sabotaging their country. In Nigeria, you may install these same monitors, and see someone around Okene, or in the creeks. But that can be done with a command and control centre, essentially for the pipelines for rapid intervention, through the sea, air and land. This is what the NNPC cannot do. It is a governance issue. Now, we are using communities, but it has its limit. The people tampering with the pipelines are coming from the same communities. So we need something more formidable and enduring.
5 million litres of PMS next year
“When we start producing at 90% next March, we shall be producing between three and five million litre of PMS per day, or about 100 to 150 trucks per day”.