Hope rises for local refineries
LOCAL refineries may have been roused from years of avoidable slumber and incapacitation, going by information coming from the two located in Warri and Port Harcourt.
Lack of proper maintenance of the ageing equipment and corruption have mostly been blamed for a situation in which the refineries, for many years, failed to provide petroleum products for domestic use, much less for export. As a result, Nigeria was forced into a near-total importation of such products like Premium Motor Spirit (petrol), Automotive Gas Oil (diesel), Liquefied Petroleum Gas (LPG) and Dual Purpose Kerosene (DPK) among others.
But the story is changing at Warri Refining and Petrochemical Company (WRPC) and Port Harcourt Refining Company (PHRC) where improved, sustained maintenance activities are yielding salutary results.
For example, it is becoming increasingly likely that the PHRC could be operating at 90 per cent capacity and above by the first quarter of 2016 if the current rehabilitation is sustained and completed.
The nature of facility maintenance going on at Port Harcourt Refinery is aimed at carrying out a major overhaul of the facilities using competent in-house capacity and indigenous contractors since foreign experts initially engaged by the Federal Government to come to Nigeria for the maintenance, failed to do so.
The in-house expert staff are supported by some indigenous contractors which include DBN, DKG and CHROME.
Also, the prospect of the WRPC coming on stream again was heightened last June.
The refinery was shut down around August 2013 following dangerous cases of fire incidents in the Fluid Catalytic Cracking (FCC) unit of the plant.
A reliable source at the PHRC refinery disclosed to The Guardian that what is being done remains the closest alternative to a Turn Around Maintenance (TAM) and it is being carried out in phases across the entire process and complementary plants.
According to him, the designed nameplate capacity of both the old and the new Port Harcourt refineries put together has been put at 210,000 barrels per stream day.
“Before this rehabilitation which commenced on the May 15, 2015, we ramped up production to 60 per cent capacity with routine maintenance and major overhaul of some critical and strategic equipment. Hence we declared a profit of N11.2 billion in the month of December 2014 when we had crude supply that lasted us for 18 days, seven hours,” he said.
The source revealed that with the on-going rehabilitation, management of the PHRC look forward to operating at 90 per cent capacity and above when it is completed in its entirety by first quarter of 2016.
The source told The Guardian during a visit to the plant yesterday, that much of the work in Area One made up of the Crude Distillation Unit (CDU), where kerosene, diesel and LPG are produced was completed two weeks ago with finished products continuously going to storage.
In addition, the source said work on the Fluid Catalytic Cracking Unit (FCCU), where Vacuum Gas Oil (VGO) and heavy diesel oil (HDO) are cracked to obtain more valuable products, like FCC gasoline used as PMS blend is progressively sustained and the management looks forward to the commissioning in two weeks time with other units to follow.
It was gathered that products from the Port Harcourt refinery include, Liquefied Petroleum Gas (LPG), Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK), Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO) and High Pour Fuel Oil (HPFO).
The Guardian gathered that all aforementioned products are continuously going to storage and being evacuated to Pipeline Products Marketing Company (PPMC) for sale to the public through marketers.
“Yes, production is on and it is going to be continuous as long as we have supply of crude oil. For now we are receiving crude through marine via the Bonny end as a result of damaged crude supply pipe lines to Port Harcourt Refining Company due to continuous pipeline vandalism. We are just managing to do with the alternative marine supply of crude by vessel and we consider it better instead of having nothing to refine.
But, it is less efficient,” he said.
The Managing Director of PHRC, Dr. Bafred Audu Enjugu, during a Rivers State Governor Nyesom Wike’s visit to the plant said the refinery has outsourced its power need to a private power provider.
The refinery has been in the state of disrepair for over a decade due to lack of maintenance and what some key players in the petroleum sector have described as a deliberate and calculated attempt to kill it to serve the selfish interest of a few Nigerians.
Efforts to get officials of the Warri Refining and Petrochemical Company to comment on the current state of the nation’s pioneer refinery did not quite succeed as an official in the Public Affairs Department told The Guardian to seek necessary information from their corporate headquarters in Abuja.
But an official of the refinery who sought anonymity confirmed that the WRPC started operation about a week ago and that some of the refined products being sold to marketers by the PPMC at its Warri depot are actually from the refinery. The official did not give details of the present production capacity of the refinery, though this can be easily calculated.
If a barrel of crude produces 73.8 liters of PMS or petrol when refined this means that the WRPC, with an installed capacity of 125,000 barrels per day would now be producing 62,500 barrels per day (at 50 per cent capacity), translating to 4,612,500 litres of petrol per day.
Since 1994, WRPC has been unable to perform optimally as the authorities had consistently failed to carry out mandatory TAM every four years. This development had forced the plant to operate at less than 60 per cent of its installed capacity.
The last TAM in 1994, ended in controversial circumstances as the exercise was marred by corruption and shortly after, led to the setting up of the probe panel headed by the late Group Managing Director of the NNPC, Aret Adams.
Investigation by The Guardian revealed that about a week after the announcement of its restarting, the refinery actually received its first consignment of crude oil which had been stopped since 2012.
The crude supply to the plant were brought by vessels and were pumped into receptors at the refinery’s jetty, a development said to have sent members of staff of the company into jubilation after being redundant for a while and seeing barrels of crude oil being discharged for the first time in more than two years.
Supply of crude to the refinery over the years had been frustrated by repeated sabotage by militants.
The pipeline servicing WRPC with crude oil from the production platforms of Chevron Nigeria had been severally blown up by militants.
The pipeline, known as Chanomi Creek Pipeline, runs from the Abiteye fields of Chevron in Escravos, Warri South West Local Council, Delta State.
This development is believed to have forced the Federal Government to suspend supply of crude oil to the Warri refinery through the pipeline.
Heads rolled in the ailing Warri Refinery in 2013 following two fire incidents in the Fluid Catalytic Cracking (FCC) unit, regarded in the oil industry as the heart of refining operation.
The outcome of the probe which followed, The Guardian learnt, led to the commencing of the TAM at the refinery in 2013. The TAM was completed in this year and has opened the way for the plant coming back on stream.
The Warri refinery, the first government-owned refinery was inaugurated in 1978 to process 100,000 barrels of crude oil per day. However, it was redesigned in 1987 to process 125,000 barrels of crude oil per day. But the plant had operated epileptically since inception due to poor maintenance of its strategic component units.