The scandal in Port Harcourt Refinery (2)


By Eric Teniola

The first instalment of this piece published last week focused on the frustrating bid to maintain the four refineries in the country. This is the concluding part of the essay

THE refinery was upgraded in 1971 to 60,000 barrel per day. The second Port Harcourt Refinery, a deep conversion facility, with an installed capacity of 150,000 barrels per day was built and commissioned on November 25, 1989 under General Ibrahim Babangida (79), bringing the combined capacity of the refinery to 210,000 barrels per day.

The refinery in 2000 under President Olusegun Obasanjo (84), operated at about 47 per cent of the total installed capacity. The turn Around Maintenance, TAM, was last carried out in 1994 under General Sani Abacha (September 20, 1943- June 8, 1998). The old refinery was shut down because internally-generated power was not enough to run the two refineries and public power was unreliable.

Warri Refinery was commissioned in 1979 under General Olusegun Obasanjo with an initial capacity of 100, 000 barrels per day. It was de-bottle-necked to a capacity of 125,000 barrels per day in 1988. It was further expanded in 1988 with the addition of a petrochemical plant with a capacity to produce 35,000 metric tonnes and 18,000 metric tonnes per annum of polypropylene and carbon black respectively. The last TAM was carried out in 1994. The refinery operated from January to February 2000 at about 10.3 per cent of the installed capacity and was shut down because the main heater blew up. In 2000, four capital projects were identified for optimising the performance of the refinery at a total cost of $220.7 million and N351.15 million.

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The Kaduna Refinery was commissioned in 1980 by President Shehu Usman Aliyu Shagari (February 25, 1925-December 28, 2018) with an initial capacity of 100,000 barrels per day. In 1985, under Major General Muhammadu Buhari (retd.), it was de-bottle-necked to 110,000 barrels per day.

The refinery was integrated with a petrochemical plant in 1988 with a capacity for the production of 30,000 metric tonnes of linear alkyl benzene. It was shut down in August 2000 partly to allow rehabilitation of the heaters and because the TAM which started in 1998 was yet to be completed. The last TAM carried out before then was in 1992 which means that two consecutive TAMs (1994 and 1996) were not carried out. Eighteen capital projects were identified for optimising the performance of the refinery at a total cost of N2 billion.

The refineries are limited liability companies which should be able to do their production planning, funds projection and procurement. They should also have audited profit and loss account and balance sheet. The refineries though limited liability companies, are not run like enterprises, which should pay their way.

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They have no Board of Directors and are tied to the apron string of the NNPC in a system of inter-locking directorates. They operate by presenting annual budgets and performance targets plans to the NNPC, which examines the budget and makes resources available on the basis of request and availability and not necessarily requirement.

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Furthermore, the financial operations of the refineries, whereby they are regarded as contract processors, to whom fixed processing fees are paid by the NNPC, who in turn supplies the crude oil and consigns all the petroleum products to PPMC for sale and distribution, does not allow for proper appreciation of the cost structure and profitability of refining operations.

In 2000, the Port Harcourt Refinery was refining only about 90,000 barrels per day out of its installed combined capacity of 210,000 barrels per day since the old refinery was shut down due to a haulage constraints on naphtha and fuel oil tankage.

The major processes used by the refinery to produce petroleum products from crude oil are crude distillation, vacuum distillation, Naptha Hydro-Treating, Catalytic Cracking and Gas Concentration. The saleable products obtainable from the refinery are liquefied petroleum gas or cooking gas, premium motor spirit or petrol, dual purpose kerosene (aviation/household), automotive gas oil or diesel and fuel oil. The refinery was also said to produce some special products namely – unstenched LPG for insecticide manufacture, straight run naphtha and propylene rich LPG, feed to Eleme Petrochemical Plant. Product availiability at PHRC was said to be satisfactory in spite of the ongoing Turn Around Maintenance, TAM, which was commenced in May, 2000.

Port Harcourt Refinery was said to generate its own steam and electrical power. During normal operations, three boilers and three turbo-generators were used to supply the required energy. Evacuation facilities available included 120 storage tanks of various sizes for crude oil, intermediate and finished products; two modern jetties at Okrika each of which had two berths – an outer berth capable of handling up to 35,000.00 DWT vessels, and inner berth for ships of up to 5,000 DWT; A 55km pipeline constructed from NNPC/Shell Bonny Terminal to supply crude to the refinery and road tankers and pipelines. The refinery has modern treatment plants to handle all waste from its operations.

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The constraints of the refinery were poor performance of the two other refineries in the country; inadequate products evacuation facilities. By next year the $12 billion Dangote oil refinery being built on 6180 acres of land between the Atlantic Ocean and the Lekki Lagoon will take off and will process 650,000 barrels of crude oil daily.

With the Dangote Refinery and its monopolistic policy patronised, endorsed, encouraged and approved by the central government, whatever money to be spent on Port Harcourt Refinery will go down the drain again. The money will just be a waste. The Federal Government has so much money to waste while the states are dying. And this is in a country that has the growing population of unemployed youths, while poverty is on the rise daily. And this is in a country where nothing works while millions live in fear because of insecurity. And this is in a country that has the largest number of displaced people in Africa. And this in a country that is marching backward so fast.  It’s so sad.

Vanguard News Nigeria

The post The scandal in Port Harcourt Refinery (2) appeared first on Vanguard News.

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