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Contract awards for rehabilitation of Kaduna and Warri refineries slated for July ending

The award of contracts for the rehabilitation of Kaduna and Warri refineries would likely happen by the end of July, the state oil company has announced.

Kaduna has capacity for refining 110,000 barrels a day, while Warri handles 125,000 b/d, but both have been idle for quite a long while. The contract for revamping the Port Harcourt refinery has been awarded.

Mallam Mele Kyari, GMD, NNPC

According to the Group Managing Director of the Nigerian national Petroleum Corporation (NNPC), Mele Kyari, the corporation hopes to sign engineering, procurement and construction (EPC) contracts for the facilities within the next three weeks.

He said the NNPC will not use any federal money to rehabilitate the refineries, but will instead secure bank loans and repay them through the facilities’ cash flows.

The same process will be applied to secure the purchase of a 20 per cent stake in the 600,000 b/d Dangote refinery, said Kyari. Lenders are evaluating investment in this facility, which will start producing in 2022, he said.

Warri Refining and Petrochemical Company

“As the national oil company of the country we have the responsibility to guarantee energy security,” he said of the rationale behind the investment, adding that it would be impossible for “any country to watch a business of this magnitude and sensitivity to run without the involvement of a national company.”

The NNPC is also considering the construction of five condensate refineries, which will provide a cheaper alternative to produce light-end products. NNPC aims to reach final investment decisions on two, which will have a combined 200,000 b/d of condensate refining capacity, within the next three months.

“They are cheaper and faster to construct and they will also take off the burden of the Opec+ crude output restrictions,” Kyari said

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