• Tuesday, June 18, 2024
businessday logo

BusinessDay

Nigeria approves $1.5bn for rehabilitation of Port Harcourt refinery

Nigeria approves $1.5bn for rehabilitation of Port Harcourt refinery

A year after shutting down all of its dilapidated refineries to figure out how to fix them, the Federal Government of Nigeria has approved $1.5 billion for the rehabilitation of Port Harcourt Refinery in Rivers State.

At the 38th virtual Federal Executive Council meeting presided over by President Muhammadu Buhari in Abuja on Wednesday, Timipre Sylva, minister of state for petroleum resources, said the contract for the project has been awarded to an Italian
company, Technimount SPA, who are experts in refinery maintenance.

“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of 1.5 billion, and that memo was $1.5 billion and it was approved by council today,” he said.

Sylva said the funding has three components from Nigerian National Petroleum Corporation (NNPC) Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.

If the financing is concluded, most experts expect the long-overdue rehabilitation of the refinery to reduce Nigeria’s hefty fuel import bill.

Read Also: These three oil majors are betting big on wind energy

“So we are happy to announce that the rehabilitation of productivity refinery will commence in three phases. The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity,” Sylva said.

He noted that the second phase is to be completed in 24 months and all the final stages will be completed in 44 months and consultations approved.

The dysfunction of its domestic refineries has long put the country in an ironic situation. It exports large volumes of crude to plants overseas, then pays a premium to import the fuels its customers produce.

Pledges to fix the facilities have been made and broken again and again over the years. For at least a decade, NNPC’s 445,000-barrels a day of refining capacity barely processed 20 percent of that amount.