Lagos — The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, has blamed pipeline vandalism for the shutdown of the nation’s four refineries.
Speaking on a Channels Television programme, ”Politics Today”, Kyari said the refineries’ shutdown was unavoidable as they could no longer be fed with crude oil due to pipeline vandalism.
He said: “That means you’re not able to deliver crude oil to them to operate to the maximum of their capacity.
“Secondly, what you call rehabilitation is different from turnaround maintenance (TAM). TAM is a routine endeavour. When you talk about rehabilitation, that means you have colossal loss of capacity in the refineries. It means you’ve not done TAM properly, you’ve not replaced parts and when due and it has gotten to a point where you’re not able to operate the refineries in the full installed capacities.
“With all the TAM down, it was impossible to run any of these refineries at 90% capacity. Our estimate was that we could run at 60% capacity but if we do that, it’s simply value destruction. You take a $100 crude and bring out $70 product, it doesn’t make sense.
“We want to make them work and that’s why we’re doing full rehabilitation. Refineries are like aircraft. I’ve visited refineries that are over 100 years old that are still functioning. Refineries don’t die like cars or other assets.
“You saw our 2018 financial statement which indicated that we’ve lost money in the refineries”.
”Our target is that when they come back to life, they’ll run over 90% capacity. We’re also working with the private sector to establish condensate refineries”.
Between 1976 and 1989, the government, through the NNPC, built three refineries in Port Harcourt, Warri, and Kaduna in addition to an existing one in Port Harcourt built by Shell and BP in 1965, which the NNPC later bought over. The four refineries have a combined capacity of 445,000 barrels per day.
The NNPC then installed a network of pipelines across the country, totaling over 5,000 kilometres in length to facilitate crude supply to the refineries and product evacuation from them.
The network consists of 4,315 km of multi-product pipelines and 701km of crude oil pipelines, inter-connecting 22 fuel depots, the four refineries, and the jetties at Atlas Cove, Lagos and Warri, Delta State