By Ajuma Edwina Ameh
Amid controversies by some Nigerians on the $1.5 billion for the rehabilitation of Port Harcourt refinery, the Nigerian National Petroleum Corporation (NNPC) has explained why the Federal Government is spending the huge sum.
The Group Managing Director of NNPC, Mallam Mele Kyari, disclosed that the funds approved for the 210,000 barrels per day capacity refinery was for complete rehabilitation and not Turn-Around Maintenance (TAM).
“lt is a worthy undertaking embarked upon after diligent consideration and in strict adherence to industry best standards,” he said.
Kyari told reporters at the NNPC Towers, Abuja on Monday that in terms of outlook and job scoping, the rehabilitation project is different from the routine TAM which was last carried out on the 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.
On how to finance the project, the NNPC boss said that African Export-Import Bank (Afreximbank), as a reliable lender, has agreed to raise $1billion towards the rehabilitation project, arguing that a credible and capable lender like Afreximbank would never agree to put such huge amount of money where there would be no value.
He, however, dismissed the contention by critics that the $1.5bn approved for the rehabilitation of the Port Harcourt Refinery was enough to build a brand new refinery, stressing that a new refinery would cost the nation between $7bn and $12bn and that such funds were not available now.
According to Kyari, the corporation observed an unprecedented level of transparency and due diligence in arriving at the decision to award the Engineering, Procurement, and Construction (EPC) contract to Tecnimont spA. of Milan, Italy, after a competitive bidding process, which consists of a governance structure and tender process.
He said the process included key independent external stakeholders such as the Ministry of Finance, Nigeria Extractive Industry Transparency Initiative (NEITI), Infrastructure Concession Regulatory Commission (ICRC), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG).
On the choice of Tecnimont SpA as the contractor to handle the project, Kyari explained that the company is a representative of the Original Refinery Builder (ORB) and is one of the top 10 global Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) contractor in refineries, adding that it has requisite experience in similar jobs across the globe.
He said the National Engineering and Technical Company (NETCO) and Kellogg, Brown & Root (KBR) and are acting as NNPC Engineering Consultants to the project with support from Wood Mackenzie to ensure that the project is delivered on schedule, within budget and at the right quality.