Lagos — The purported “revamping” of the Port Harcourt refinery by Italian-based Maire Tecnimont, will cost Nigeria a whopping $50 million or about N18 billion based on parallel market rate, SweetcrudeReports can authoritatively report.
However, findings showed that the money will not be spent on giving the 150,000 barrels per day old refinery a new and improved form, rather, the money is meant for “checks and equipment inspection”, according to our source.
“This is just the first phase”, our source noted.
The refinery had been operating well below capacity due to mismanagement and lack of investment, forcing the NNPC to import the bulk of petrol consumed across the country.
However, the Corporation said the revamp will ensure local sufficiency in refined petroleum products.
The work which would last for six months starting from the end of this month would be the first since the last revamp was carried out 19 years ago, the NNPC said on Thursday.
The Corporation before now had unsuccessfully tried to woo different consortiums to revamp the refineries while it pays for the work via offtake of refined products rather than cash.
But now, it would pay for the work with its own money and then raise debt at the financial market afterward.
The Corporation said it could not proceed with the earlier funding strategy by its DSDP Term Contractors/Consortia due to “onerous conditions demanded” after more than twelve months of negotiations.
The Port Harcourt overhaul would be followed by the Warri refinery, and then the Kaduna refinery.
At the end of the first phase, the Port Harcourt refinery should reach 60 percent capacity utilization, increasing to a minimum of 90 percent at the second phase of the rehabilitation project which entails a comprehensive revamp of the complex aimed at restoring the refinery, according to NNPC said.
Phase 2 of the project would be executed on an Engineering Procurement Construction basis by Tecnimont in collaboration with the original builders of the plant, JGC of Japan.
Italy’s Eni would act as adviser, and link to procure critical materials for the work.
In a nation of 200 million people that consumes roughly 40 million liters per day, Oil minister Emmanuele Ibe Kachikwu had last year, vowed to end petrol imports latest this year.
Nigeria is also relying heavily on Aliko Dangote’s 650,000 bpd refinery to meet its current domestic demand.