By Clara Nwachukwu
Current data on refineries production in Nigeria indicate
that more heavy or fuel oils (low and high fuel oil/black oil)
are being produced from the four refineries than other high
demand products like premium motor spirit, PMS, otherwise
known as petrol. The revelation comes despite assurances
by the Nigerian National Petroleum Corporation, NNPC,
which said last week that two of its refineries were working
between 60 and 80 percent of their installed capacities.
NNPC had promised that the four refineries would be re-
streamed by July end, when the turn around maintenance,
TAM, of the hitherto almost comatose refineries would have
been rounding up, thus, buoying high hopes for imminent
relief from products scarcity in the country.
Capacity utilisation
However, status of the refineries operations as at July 31,
2015, exclusively obtained by Sweetcrude, indicate that the
refineries cannot still meet the daily consumption
requirement of between 40 and 42 million litres/day for
petrol. For now, the Port Harcourt Refining Company, PHRC
2, is only able to produce about 39million litres of petrol, i.e.
38,906 x 1000 = 38.906 million compared with fuel oil, which
is in low demand of about 49 million litres.
This is because aside from the PHRC 2, the fluid cracking
catalytic units, FCCUs of the other refineries are still under
rehabilitation. But succour is expected from the Warri
Refining and Petrochemical Company, WRPC, once its FCCU
has been fully rehabilitated, to produce additional 30 million
plus litres, while capacity utilisation in the Kaduna Refining
and Petrochemical Company, KRPC, remains nil.
KPRC only produces automotive gas oil, AGO, also known as
diesel, and dual purpose kerosene, DPK, which can be used
as both aviation fuel/Jet-A1 and household kerosene, HHK
Nigeria has four refineries with combined capacity of
445,000 barrels per day, bpd, comprising: PHRC 1 –
150,000bpd; PHRC 2 – 60,000bpd; KRPC – 110,000bpd; and
WRPC 125,000bpd.
But current status data put the Crude Distillation Unit,
CDU,capacity utilisation in the four refineries as, PHRC 2 re-
streamed on July 20th -60.40 percent; PHRC 1 under rehab –
nil; KPRC re-streamed July 30th – 64.4 percent; and WRPC –
62 percent.
Broken further production outputsfrom the refineries are
shown in the table above:
Explanatory notes:
-Catalytic Reforming Unit (CRU)
-Naphtha Hydro-treating Unit (NHU)
-Vapor Recovery Unit (VRU)
-Gas Processing Unit (GPU)
-NNPC pronouncements
But on July 29th the NNPC declared that “the Port Harcourt
and Warri refineries have been successfully re-streamed
after a nine-month phased rehabilitation exercise conducted
by its in-house engineers and technicians.”
The Corporation
in a statement revealed that both plants had commenced
preliminary production of petroleum products after
successful test-runs.
It added that while PHRC is ramping up its operation to
about 60 percent of its 210, 000 barrels per day name plate
capacity, while WRPC production is projected to hit 80
percent of its installed 125, 000 bpd capacity, even as the
FCCUs have not been re-streamed. The NNPC further said
the Port Harcourt Refinery is projected to boost the nation’s
local refining capacity with a product yield of 5million litres
of petrol per day while Warri Refinery would contribute 3.5
million litres of petrol to local refining capacity.
It is uncertain whether these outputs are based on actual or
projected efficiencies since the FCCUs in the two refineries
are still down and contrasts sharply with the production data
already provided.
FCC challenges
However, the NNPC spokesman, Mr. OhiAlegbe, who issued
the statement on the refineries capacity utilisation did not
speak about the type of products churned out or of FCCU
challenges, without which the refineries cannot function
effectively. But a top management source of the Pipelines
and Products Marketing Company, PPMC, the Corporation’s
marketing arm which evacuates products from the
refineries, noted that the effectiveness of the FCCU
determines the type and quantity of products produced.
He told Sweetcrude in confidence: “That the refinery is not
producing enough PMS for the market does not mean the
refinery is not working. What it simply means is that the
refinery is churning out more fuel oil, which is the residue
from crude, and which is not in high demand in Nigeria.
“What is responsible for this state is the efficiency of the
FCCU. If the FCCU is working, we will get higher yield of other
products like PMS and lesser fuel oil whether low or high,
and vice versa. So it means that the more efficient the FCCU,
the better the refinery output.”
He however noted that the efficiency of the refinery is not
static, as you will get different performance efficiency
depending on the effectiveness of the FCCU.
Refinery TAM
The turnaround maintenance for the refineries were
abandoned for decades, but since the democratic
dispensation in 1999, successive governments have tried to
overhaul the refineries to make them more efficient without
success because of their long years of abandonments, even
as fuel needs increased daily.
Later on, the TAM assumed political overtones, as
rehabilitation contracts were awarded to friends of the
government, which did not improve the status of the
refineries until the process was given up entirely in favour of
products importation. Importation meant more “jobs for
the boys” who metamorphosed into “cartels”, living large,
due tothe corruption associated with the management of the
subsidy regime, at the expense of other Nigerians that have
to queue for hours to get fuel products.
It was therefore with great expectations that at the twilight of
former President Goodluck Jonathan’s administration,
Nigerians received the news that all the refineries will
undergo the required maintenance using local contractors,
to reduce costs from using the original equipment
manufacturers, OEMs.
TAM-Rehab
The NNPC has been very
evasive on the type of TAM
being carried out, or the
contractors handling the
projects. The closest
information on this was given
by the Managing Director,
KPRC, Mr. Saidu Mohammed,
who told Sweetcrude that what was happening in the
refineries was a TAM-rehabilitation, without giving further
details on the contractors handling them.
He said: “We are doing TAM (Turn Around Maintenance)-
Rehabilitation (TAM-Rehab) while the refinery is running. We
try as much as possible not to shut down the entire refinery
while this is going on.” Disclosing that the KPRC rehab will
last till March 2016, after 18 months process, Mohammed
however expressed confidence in the capacity of the local
contractors to execute the jobs.
According to him, “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.”
Providing insight into the rehabilitation exercise, the NNPC
in its statement said it had to adopt the phased
rehabilitation strategy after the Original Refinery Builders
(ORB) who were initially contacted for the project came up
with unfavorable terms.
“Though a decision was taken in 2011 to rehabilitate all the
refineries using the ORB of each of the refineries, we were
impelled to switch strategy after the ORBs declined
participation and nominated some partners in their stead
who came up with outrageously unfavorable terms.
“The nominated partners, as sole-bidders came up with
humongous price offers after two years of thorough and
exhaustive scope of work definition and price negotiations.
The proxies were also unwilling to provide post
rehabilitation performance guarantees.
“The phased rehabilitation strategy which entailed phased
and simultaneous rehabilitation of all the refineries using in-
house and locally available resources in line with the spirit
and letter of the Nigerian Content Law, also involved the use
of Original Equipment Manufacturer representatives to
effect major equipment overhaul and rehabilitation.”
The Corporation also claimed that the phased rehabilitation
programme which started in October 2014, after the
required funding stream was established created a 70
percent reduction in costs without giving full details. The
Corporation said that with the successful re-streaming of the
PHRC and WRPC, attention has now moved to the Kaduna
Refinery, which is billed to come on stream soon..
Current data on refineries production in Nigeria indicate
that more heavy or fuel oils (low and high fuel oil/black oil)
are being produced from the four refineries than other high
demand products like premium motor spirit, PMS, otherwise
known as petrol. The revelation comes despite assurances
by the Nigerian National Petroleum Corporation, NNPC,
which said last week that two of its refineries were working
between 60 and 80 percent of their installed capacities.
NNPC had promised that the four refineries would be re-
streamed by July end, when the turn around maintenance,
TAM, of the hitherto almost comatose refineries would have
been rounding up, thus, buoying high hopes for imminent
relief from products scarcity in the country.
Capacity utilisation
However, status of the refineries operations as at July 31,
2015, exclusively obtained by Sweetcrude, indicate that the
refineries cannot still meet the daily consumption
requirement of between 40 and 42 million litres/day for
petrol. For now, the Port Harcourt Refining Company, PHRC
2, is only able to produce about 39million litres of petrol, i.e.
38,906 x 1000 = 38.906 million compared with fuel oil, which
is in low demand of about 49 million litres.
This is because aside from the PHRC 2, the fluid cracking
catalytic units, FCCUs of the other refineries are still under
rehabilitation. But succour is expected from the Warri
Refining and Petrochemical Company, WRPC, once its FCCU
has been fully rehabilitated, to produce additional 30 million
plus litres, while capacity utilisation in the Kaduna Refining
and Petrochemical Company, KRPC, remains nil.
KPRC only produces automotive gas oil, AGO, also known as
diesel, and dual purpose kerosene, DPK, which can be used
as both aviation fuel/Jet-A1 and household kerosene, HHK
Nigeria has four refineries with combined capacity of
445,000 barrels per day, bpd, comprising: PHRC 1 –
150,000bpd; PHRC 2 – 60,000bpd; KRPC – 110,000bpd; and
WRPC 125,000bpd.
But current status data put the Crude Distillation Unit,
CDU,capacity utilisation in the four refineries as, PHRC 2 re-
streamed on July 20th -60.40 percent; PHRC 1 under rehab –
nil; KPRC re-streamed July 30th – 64.4 percent; and WRPC –
62 percent.
Broken further production outputsfrom the refineries are
shown in the table above:
Explanatory notes:
-Catalytic Reforming Unit (CRU)
-Naphtha Hydro-treating Unit (NHU)
-Vapor Recovery Unit (VRU)
-Gas Processing Unit (GPU)
-NNPC pronouncements
But on July 29th the NNPC declared that “the Port Harcourt
and Warri refineries have been successfully re-streamed
after a nine-month phased rehabilitation exercise conducted
by its in-house engineers and technicians.”
The Corporation
in a statement revealed that both plants had commenced
preliminary production of petroleum products after
successful test-runs.
It added that while PHRC is ramping up its operation to
about 60 percent of its 210, 000 barrels per day name plate
capacity, while WRPC production is projected to hit 80
percent of its installed 125, 000 bpd capacity, even as the
FCCUs have not been re-streamed. The NNPC further said
the Port Harcourt Refinery is projected to boost the nation’s
local refining capacity with a product yield of 5million litres
of petrol per day while Warri Refinery would contribute 3.5
million litres of petrol to local refining capacity.
It is uncertain whether these outputs are based on actual or
projected efficiencies since the FCCUs in the two refineries
are still down and contrasts sharply with the production data
already provided.
FCC challenges
However, the NNPC spokesman, Mr. OhiAlegbe, who issued
the statement on the refineries capacity utilisation did not
speak about the type of products churned out or of FCCU
challenges, without which the refineries cannot function
effectively. But a top management source of the Pipelines
and Products Marketing Company, PPMC, the Corporation’s
marketing arm which evacuates products from the
refineries, noted that the effectiveness of the FCCU
determines the type and quantity of products produced.
He told Sweetcrude in confidence: “That the refinery is not
producing enough PMS for the market does not mean the
refinery is not working. What it simply means is that the
refinery is churning out more fuel oil, which is the residue
from crude, and which is not in high demand in Nigeria.
“What is responsible for this state is the efficiency of the
FCCU. If the FCCU is working, we will get higher yield of other
products like PMS and lesser fuel oil whether low or high,
and vice versa. So it means that the more efficient the FCCU,
the better the refinery output.”
He however noted that the efficiency of the refinery is not
static, as you will get different performance efficiency
depending on the effectiveness of the FCCU.
Refinery TAM
The turnaround maintenance for the refineries were
abandoned for decades, but since the democratic
dispensation in 1999, successive governments have tried to
overhaul the refineries to make them more efficient without
success because of their long years of abandonments, even
as fuel needs increased daily.
Later on, the TAM assumed political overtones, as
rehabilitation contracts were awarded to friends of the
government, which did not improve the status of the
refineries until the process was given up entirely in favour of
products importation. Importation meant more “jobs for
the boys” who metamorphosed into “cartels”, living large,
due tothe corruption associated with the management of the
subsidy regime, at the expense of other Nigerians that have
to queue for hours to get fuel products.
It was therefore with great expectations that at the twilight of
former President Goodluck Jonathan’s administration,
Nigerians received the news that all the refineries will
undergo the required maintenance using local contractors,
to reduce costs from using the original equipment
manufacturers, OEMs.
TAM-Rehab
The NNPC has been very
evasive on the type of TAM
being carried out, or the
contractors handling the
projects. The closest
information on this was given
by the Managing Director,
KPRC, Mr. Saidu Mohammed,
who told Sweetcrude that what was happening in the
refineries was a TAM-rehabilitation, without giving further
details on the contractors handling them.
He said: “We are doing TAM (Turn Around Maintenance)-
Rehabilitation (TAM-Rehab) while the refinery is running. We
try as much as possible not to shut down the entire refinery
while this is going on.” Disclosing that the KPRC rehab will
last till March 2016, after 18 months process, Mohammed
however expressed confidence in the capacity of the local
contractors to execute the jobs.
According to him, “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.”
Providing insight into the rehabilitation exercise, the NNPC
in its statement said it had to adopt the phased
rehabilitation strategy after the Original Refinery Builders
(ORB) who were initially contacted for the project came up
with unfavorable terms.
“Though a decision was taken in 2011 to rehabilitate all the
refineries using the ORB of each of the refineries, we were
impelled to switch strategy after the ORBs declined
participation and nominated some partners in their stead
who came up with outrageously unfavorable terms.
“The nominated partners, as sole-bidders came up with
humongous price offers after two years of thorough and
exhaustive scope of work definition and price negotiations.
The proxies were also unwilling to provide post
rehabilitation performance guarantees.
“The phased rehabilitation strategy which entailed phased
and simultaneous rehabilitation of all the refineries using in-
house and locally available resources in line with the spirit
and letter of the Nigerian Content Law, also involved the use
of Original Equipment Manufacturer representatives to
effect major equipment overhaul and rehabilitation.”
The Corporation also claimed that the phased rehabilitation
programme which started in October 2014, after the
required funding stream was established created a 70
percent reduction in costs without giving full details. The
Corporation said that with the successful re-streaming of the
PHRC and WRPC, attention has now moved to the Kaduna
Refinery, which is billed to come on stream soon..
