Why we’re shutting down 3 refineries – NNPC

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Posted on September 15, 2017

The Nigerian National Petroleum Corporation (NNPC), has said that its  plan to shut down its three refineries located in Warri, Kaduna and Port Harcourt was to bring them to their nameplate production capacities.

Group Managing Director of NNPC, Dr. Maikanti Baru, said this in Abuja on Wednesday on the sidelines of the inaugural Nigerian Pipeline Security Conference and Exhibition, organised by the Pipeline Association of Nigeria (PLAN).

The NNPC boss expressed optimism that the refineries would return as new facilities after the overhaul ahead of governor’s plan to stop the importation of petroleum products by 2019.

According to Baru, the comprehensive rehabilitation is aimed at returning the three refineries back to their nameplate production capacities for optimal performance.

For over 8 years, the three refineries have been operating far below their 445,000 barrels per day (bpd) combined capacity with trillions spent on continuous turn around maintenance that never yielded the desired result.

For instance, the NNPC in this latest financial and operating report for June 2017, stated that the three refineries produced 222,585 metric tons (MT) of finished

Petroleum Products out of 231,836MT of Crude processed at a combined capacity utilisation of 12.73 per cent compared to 23.09 percent combined capacity utilisation achieved in the month of May 2017.

According to the Corporation, the deprived operational performance is attributed to WRPC and KRPC’s downtime during the month under review.

‘‘The ongoing revamping of the refineries will enhance capacity utilisation once completed. Only PHRC was active during the month under review. WRPC was shut-down due to power failure,’’ the report said.

Though, the planned shutdown of the refineries may not have much effect on domestic consumption as  petrol importation by the marketers have dropped from 60 per cent at the peak of the subsidy regime in 2011, to zero at the moment,.

NNPC is again saddled with the responsibility of bridging the supply gap and incurring huge losses fuelling allegation of corruption in the future.

“As you know, it has been the perception of the public that the repairs of the refineries are never done thoroughly; so this time, our intention is to shut down the refineries when we are ready.We will then fully bring them back to what they should be as new refineries.

Obviously, it is going to be a complex procedure; and as such, we have to breakdown the various work packages to ensure that all the various workforce have sufficient focus,’’ Baru said.

He explained that the eight committees on the refineries’ rehabilitation that were inaugurated comprised top management officials that would be having a day-to-day look at the work streams.

According to him, members of the committee were charged  to deploy “out of the box solutions” to ensure that the refineries return to their good old days of top class performance.

“I am convinced that the teams we have selected here will give the necessary direction towards returning the refineries back to their optimal levels of performance.”

The GMD explained that in executing the assignment, the Committees were expected to deliver well and within schedule as according to him, time was of the essence.

Source: http://sunnewsonline.com/why-were-shutting-down-3-refineries-nnpc/

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