Govt Snubs Public Criticism, Signs $1.5bn Deal For Rehabilitation Of PH Refinery

PH Refinery.
Port Harcourt Refinery in Alesa-Eleme, Rivers State.

BEVERLY HILLS, April 06, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) has signed an Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) contract with Tecnimont SpA, a subsidiary of Maire Tecnimont.

The signing is coming a few weeks after the Federal Executive Council approved the sum of $1.5 billion for the rehabilitation of the 210,000 barrels per day capacity Port Harcourt Refinery in Alesa-Eleme, Rivers State.

There had been a public outcry against the cost of the planned rehabilitation, with it being described as over-inflated and the amount capable of building a brand new or modular refinery.

The corporation, in a statement on Tuesday by the Group General Manager/Group Public Affairs Division, Dr. Kennie Obateru, said the rehabilitation project had a completion timeline between 18 and 44 months under a three-phase arrangement.

He said the contract was awarded to the Milan-based Tecnimont SpA at a lump sum contract price of US$1.5 billion, inclusive of VAT and other statutory payments.

Group Managing Director of the NNPC, Mallam Mele Kyari, described the PHRC rehabilitation project as a dream come true, noting that the project was in line with President Muhammadu Buhari’s promise to the Nigerian people to make the refineries work.

Mallam Kyari reiterated that in arriving at the choice of Tecnimont SpA, the corporation embarked on a transparent tender process that could withstand any forensic audit, noting that NNPC was ready and open to answer any question pertaining to the project.

He assured that the same transparent process had been placed on the rehabilitation of the Warri and Kaduna refineries whose EPCIC contracts would be awarded in June.

The GMD explained that the rehabilitation exercise was very different from a routine Turn-Around Maintenance as it would entail a total retrofitting of the plant with major parts and equipment replaced with new ones.

Providing further insight into the project, Managing Director of Port Harcourt Refining Company Limited, Engr. Ahmed Dikko, explained that Phases 1 and 2 of the project would get the refinery ready to receive hydrocarbons, while Phase 3 would focus on the start-up of the refinery for operation, stressing that the entire work should be delivered in 44 months.

In his remarks, Vice President, Sub-Saharan Africa Region of Tecnimont SpA, Davide Pelizzola, pledged the readiness of his company to work assiduously with the NNPC to comply with the terms and obligations of the contract.

The signing ceremony of the PHRC rehabilitation project was witnessed by the Nigeria Extractive Industries Transparency Initiative (NEITI), Infrastructure Concession Regulatory Commission (ICRC), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) amongst others.