NNPC, Daewoo sign $740m maintenance services deal to Fix Kaduna refinery
The Nigerian National Petroleum Company (NNPC) Limited has signed a maintenance services contract with Daewoo Engineering and Construction Nigeria Limited for a “quick-fix repair” of the Kaduna Refining and Petrochemical Company (KRPC) Limited
Daewoo Nigeria is a subsidiary of Daewoo E and C Co. Limited of South Korea. The company boasts of a share equity of 90 percent in South Korea and 10 percent in Nigeria.
The national oil company made this known recently via a tweet on its official twitter account.
NNPC said the project will be completed in three work packages as a maintenance services contract by Daewoo Nigeria over a 21-month period at a maximum cost of $740.7 million.
Downstream Executive Vice President, NNPC, Mr Adeyemi Adetunji, at the contract signing ceremony noted that the quick-fix strategy guarantees the fastest route to restreaming the Warri Refining and Petrochemicals Company Limited (WRPC) and KRPC for in-country production of refined petroleum products.
He said; “Restoring WRPC and KRPC back to operation will guarantee energy security for the country, and reduce dependence on imported petroleum products in view of near total dependence on the supply of imported petroleum products and the impact the ongoing Russia-Ukraine war is having on global supply.
“Also, this will generate revenue, reduce demand for forex, supply raw materials to industries, create employment for Nigerians, and ensure technology transfer, amongst other benefits.”
Adetunji noted further that the NNPC is repairing the refineries with a combination of internally generated revenue and third-party financing.
He said after the three refineries (Kaduna, Warri, and Port-Harcourt) are rehabilitated, globally reputable operations and maintenance contractors would be hired to run the refinery safely, reliably, sustainably, and profitably.
“Meanwhile, the rehabilitation of PHRC has progressed considerably. The old refinery is currently at 64 percent completion and the plant is expected back in operation in Q2 2023, while the entire PHRC rehabilitation project now stands at about 59 percent,” Adetunji added.
Adetunji also disclosed that the WRPC quick-fix project has achieved 28 percent completion and is expected to be restreamed by the end of the year.
He reiterated the commitment of the board and management of NNPC Limited towards providing all necessary support to ensure that the refineries are repaired and operational on time and within schedule.
In 2022, the NNPC signed a memorandum of understanding (MoU) with Daewoo Group, a South Korean conglomerate, for the rehabilitation of the Kaduna refinery.
In August 2021, the Federal Executive Council (FEC) approved $1.48 billion for the rehabilitation of both Warri and Kaduna refineries.
Acting Managing Director, Warri Refining and Petrochemical Company (WRPC), Desmond Inyamah, had said the refinery will commence full operations in December 2023. These efforts are geared towards sustaining the progress made at raising oil output.
Last month, the minister of state for petroleum resources, Timipre Sylva, expressed hope that Nigeria may stop the importation of petroleum products by the first quarter of 2024.
Sylva said the Port Harcourt refinery, which has a capacity of 60,000 barrels per day (bpd), will be partially restored and ready for operation by the first quarter of 2023.
The minister said in addition to several modular refinery projects in the country, the 650,000 (bpd) Dangote refinery is also expected to be operational by the end of 2023.
According to Sylva, with the combined production capacities of the Port Harcourt refinery, Dangote refinery, and the modular refineries, Nigeria would end the importation of petroleum products soon.
