Business - News - Oil & Gas - March 18, 2021

FEC approves $1.5bn for rehabilitation of Port Harcourt Refinery

The long-awaited rehabilitation of the Port Harcourt Refinery in Rivers State, which has been stalled for over two years will now proceed as planned following the approval by the Executive Council of the Federation (FEC) for the release of $1.5billion for the exercise.
The Minister of State for Petroleum Resources, Timipre Sylva, disclosed this on Wednesday at the end of the Council meeting presided by President Muhammadu Buhari at the Presidential Villa, Abuja.
Sylva said the rehabilitation exercise would be carried out in three phases spanning 18, 24 and 44 months.
The minister said the rehabilitation was in fulfillment of the Federal Government’s desire to resuscitate the country’s moribund refineries to reduce the cost of processing petroleum products, cut down on the volume of fuel imports and boost the country’s economy.
“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt Refinery for 1.5 billion dollars. The memo was approved by Council today.
“So, we are happy to announce that the rehabilitation of Port Harcourt refinery will commence forthwith in three phases.
“The first phase is to be completed in 18 months, which will take the refinery to a production capacity of 90 percent of its nameplate capacity.
“The second phase is to be completed in 24 months, and all the final stages will be completed in 44 months and consultations are approved.
“I believe that this is good news for Nigerians. The rehabilitation of refineries have commenced,” Sylva said.
The minister also disclosed that an Italian company Tecnimont, SPA of Italy was also approved by Council as the contracting firm that would undertake the repairs, while a maintenance company would also be put in place, to ensure effective maintenance culture.
On operations and maintenance of the facility, the minister acknowledged it as a big problem for the country’s refineries, adding that exhaustive discussions were held by the Council and the agreement reached that a professional operations and maintenance and operations company would be appointed to manage the refinery when it is finally rehabilitated.
“It is actually one of the conditions presented by the lenders, because the lenders said they can only give us the money if we have a professional operations and maintenance company. That already is embedded in our discussions with the lenders. We’re not going back on that,” he said.
Sylva said the needed funding for the rehabilitation work has been earmarked, saying the funding will be shouldered by the federal government, Nigeria National Petroleum Corporation (NNPC) and Africa Export-Import Bank AFREXIM.
The minister assured that rehabilitation works on Kaduna and Warri refineries would also be carried out on or before May 2023. (NAN)

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