Nigeria approves $1.5 billion for refinery upgrade

LAGOS, March 17, 2021 – Nigeria’s Port Harcourt Refinery will see a government investment of USD 1.5 billion for its rehabilitation, an official revealed on Twitter today.

The revelation was made by Bashir Ahmad, personal assistant to the president. Earlier today, Minister of State for Petroleum Resources Chief Timipre Sylva had presented a memo on the refinery to the Federal Executive Council, which made the decision, local media reported.

The Federal Executive Council (FEC) approves the sum of $1.5 billion for the rehabilitation of Port Harcourt Refinery. The rehabilitation which was awarded to Tecnimont SPA, an Italian company, will be done in three phases of 18, 24 and 44 months, HMSPR Sylva has disclosed.

— Bashir Ahmad, OON (@BashirAhmaad) March 17, 2021

Port Harcourt is the country’s largest refinery, with a capacity of 210,000 bpd. But in 2018, the refinery’s utilisation was estimated at only 15%.

In February, S&P Global reported that the Nigerian National Petroleum Corporation (NNPC) has concluded talks to raise financing of USD 1 billion for the refinery rehabilitation, with a package led by the African Export-Import Bank.

Phase one of the rehabilitation is being undertaken by Italian EPC player Tecnimont – through its local subsidiary and alongside local partners – following a 2019 contract win valued at USD 50 million.

In late 2019, NNPC announced that a full rehabilitation programme for Nigeria’s state-owned refineries would commence in 2020, adding that they would start refining crude oil at “optimum capacity” in 2022. The refineries – Port Harcourt, Kaduna and Warri – have a combined installed capacity of 445,000 bpd. However, in recent years they have operated well below this capacity.

Last year, Port Harcourt became the first African refinery to be given ISO 9001 certification. “We carried out a rigorous process with them to achieve this milestone, which has greatly improved their systems,” Ohioze Unuigbe, managing director of Bureau Veritas Nigeria, told The Energy Year.

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