NNPCL Seeks Private Partnerships to Revitalize Port Harcourt Refinery Operations

The Nigerian National Petroleum Company Limited (NNPCL) is planning to transfer the operations of the Port Harcourt Refinery to private entities as part of its efforts to enhance efficiency and productivity. This decision was revealed in an expression of interest notice posted on the NNPCL’s website and shared on its X (formerly Twitter) page.

The Port Harcourt Refinery, situated in Rivers State, is one of the four refineries owned by the NNPCL. Despite having a refining capacity of 210,000 barrels per day (bpd), the refinery has faced significant challenges due to neglect and operational issues.

In its notice, the NNPCL expressed its intention to engage “reputable and credible Operations & Maintenance (O&M) companies” to manage the Port Harcourt Refining Company (PHRC). The goal is to ensure the refinery’s reliability and sustainability in meeting the nation’s fuel supply and energy security needs. The contract will encompass various refinery processes, including crude oil receipt and storage, refining, product storage and distribution, and maintenance.

To qualify, interested companies must have a minimum average annual turnover of at least $2 billion for the fiscal years ending in 2019, 2020, 2021, and 2022. Additionally, they should demonstrate a proven track record in operating and maintaining refineries of similar size and complexity.

The Port Harcourt refineries are part of Nigeria’s state-owned refineries that have been inactive for years. However, the government is striving to revive these refineries as part of a strategy to reduce the country’s reliance on imported refined products.

In March 2021, the federal government approved a $1.5 billion contract for the rehabilitation of the Port Harcourt refinery, entrusted to the Italian company Tecnimont SPA. The project was divided into three phases spanning 18, 24, and 44 months. By December 2023, the NNPCL announced the successful completion of the Area 5 section of the refinery, including mechanical completion and flare start-up.

Mele Kyari, the CEO of NNPCL, stated that the second phase of repair works for the Port Harcourt refinery is expected to conclude by the fourth quarter of 2024. Additionally, a test run on the 60,000-bpd refinery in Port Harcourt is scheduled for completion this month, ahead of full resumption of operations.

The decision to hand over the operation of the Port Harcourt Refinery to private entities marks a significant step in the ongoing reform of Nigeria’s oil and gas sector. It is anticipated to attract vital investment into the refinery and enhance its operational efficiency. Moreover, it is expected to bolster domestic production of refined petroleum products, thus reducing Nigeria’s reliance on imported fuel.

Nairametrics