The Port Harcourt Refining Company (PHRC), one of Nigeria’s four refineries, is expected to start producing refined petroleum products by the end of this month, after undergoing a comprehensive rehabilitation project that cost about $1.5 billion.
The project, which was approved by the Federal Executive Council (FEC) in 2021, was funded mainly by Afrexim Bank and the Nigerian National Petroleum Company Limited (NNPC), the national oil company that owns the refinery.
The project covers engineering, procurement, construction, installation, and commissioning phases, and aims to restore the refinery’s capacity of 210,000 barrels per day (bpd), which had been idle for several years due to poor maintenance and vandalism.
According to NNPC, the mechanical completion of the 60,000 bpd part of the refinery was achieved in December 2023, marking the end of the construction and installation phases. The remaining 150,000 bpd part is still undergoing testing and commissioning.
The refurbished refinery is expected to improve the country’s fuel supply and energy security, as well as reduce the reliance on imported petroleum products, which cost the government billions of dollars in subsidies every year.
To ensure the sustainability and reliability of the refinery’s operations, NNPC has announced that it is looking for private sector partners to take over the operation and maintenance (O&M) of the refinery, under a model similar to the Nigeria Liquefied Natural Gas (NLNG) company, where NNPC holds a minority stake.
In a public notice issued on Monday, NNPC invited expressions of interest (EOI) from reputable and credible oil and gas firms that have the technical and financial capabilities to run the refinery.
The notice also stated that the prospective O&M companies must have a minimum average annual turnover of $2 billion between 2019 and 2022, and must submit their audited accounts for the same period.
The O&M model, according to NNPC, is one of the key requirements by the lender, Afrexim Bank, for the Port Harcourt refinery project.
NNPC’s Group Chief Executive Officer, Mele Kyari, had earlier told Reuters that the federal government was considering a plan to become a minority shareholder in all the refineries, and to bring in the private sector to take equity and grow the business.
The Port Harcourt refinery project is part of NNPC’s broader plan to rehabilitate all the refineries in the country, including the ones in Warri and Kaduna, which have a combined capacity of 240,000 bpd.
The rehabilitation work at the Port Harcourt refinery has been ongoing for over two years, according to THISDAY.