Afreximbank to raise $1bn for Port Harcourt refinery rehabilitation – NNPC
The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, has said the African Export-Import Bank has agreed to raise $1billion towards the rehabilitation of Port Harcourt refinery.
Kyari described the recently approved rehabilitation exercise of the 210,000-barrels-per-day capacity refinery as a worthy undertaking embarked upon after diligent consideration and in strict adherence to industry best standards.
He argued that a credible and capable lender like Afreximbank would never agree to put such huge amount of money where there would be no value, the corporation said in a statement on Tuesday.
He was quoted as saying that in arriving at the decision to award the Engineering, Procurement, and Construction contract to Tecnimont of Milan, Italy, after a competitive bidding process, the corporation “observed an unprecedented level of transparency and due diligence, which consists of a governance structure and tender process that included key independent external stakeholders.”
He said the stakeholders included the Ministry of Finance, Nigeria Extractive Industry Transparency Initiative, the Infrastructure Concession Regulatory Commission, the Petroleum and Natural Gas Senior Staff Association of Nigeria and the Nigeria Union of Petroleum and Natural Gas Workers.
According to Kyari, in terms of outlook and job scoping, the rehabilitation project is different from the routine turn-around maintenance, which was last carried out on the Port Harcourt refinery 21 years ago.
Kyari explained that unlike TAM, which should normally be executed every two years but was neglected for many years, the rehabilitation project would involve comprehensive repairs of the plant with significant replacement of critical equipment and long lead items to ensure the integrity of the plant on the long term.
The GMD dismissed the contention by critics that the $1.5 billion approved for the rehabilitation of the refinery was enough to build a brand new refinery.
He said a new refinery would cost the nation between $7 billion and $12billion and that such funds were not available now.
He noted that having learnt from the failure of previous models, NNPC would adopt the Operate and Maintain Model as a strategy in the execution of the rehabilitation project, which is also one of the key requirements by the lender.
