‘Why FG should scrap Kaduna refinery’
• Egboga says facility obsolete
• NNPC ‘to repair or modernise’
AS hopes rise that Nigeria’s refineries may come on stream by December, details are emerging that the Kaduna Refining and Petrochemical Company (KRPC) may not be among them, and may even need to be ‘scrapped.’
Chief among the reasons, The Guardian learnt, is because the refinery would not meet expected parameters of operation should it depend on feedstock from the Nigerian National Petroleum Corporation (NNPC).
It was also learnt that the KRPC runs on ‘obsolete analogue technology and is not fit to refine Nigeria’s light crude,’ as against what obtains at Warri and Port Harcourt refineries, both of which operate advanced refining technologies.
Former Presidential Adviser on Petroleum Matters, Dr. Emmanuel Egbogah, in an interview with The Guardian, said the Kaduna refinery has bad features, which are never discussed, especially the fact that Nigeria would have to import heavy crude from Venezuela to refine at the facility, because the country’s light crude is incompatible with the refinery’s technology.
Egbogah, who has varied experience and earned a reputation in the global oil and gas industry for his pioneering work in Venezuela, Brazil and Canada, was co-opted by former President Olusegun Obasanjo to draft the first version of the Petroleum Industry Bill (PIB) together with late Dr. Rilwan Lukman as oil minister.
In the same vein, Kachikwu, told The Guardian in an exclusive chat that the ‘complexities’ of the Kaduna refinery could compel a shutdown “to repair and modernise.”
Confirming Egboga’s position in a text message exchange, Kachikwu, however, said: “All refineries are on the 90-day fix-or-shut-to-fully-fix programme. I do not want to prejudge, although I was expecting Kaduna to stream into production as its Fuel Catalytic Cracking (FCC) unit was presumed to be in better state than others’ despite its ageing state.
Built in 1975 by the NNPC, the Kaduna refinery was constructed as a 60,000bpd-capacity plant but was upgraded to 100,000bpd, when the Federal Government mandated that the latter was the benchmark capacity of its refineries.
The refinery which was intended to be a hydro scheming type , was upgraded to an integrated facility, to produce a wide variety of petroleum products, and some lubricating base oils. It thereafter started importation of suitable paraffinic-based crude oil from Venezuela, Kuwait or Saudi Arabia.
In Egboga’s capacity as the deputy chairman of the Oil and Gas Implementation Committee (OGIC) and adviser to President Obasanjo and later Yar’Adua, he visited Nigeria’s refineries to assess their operational capacity and made case for the setting up of new ones to shore up the deficit of petroleum needs in the country.
According to him: “Government should scrap the Kaduna refinery and build a new one. There are many bad features of the Kaduna refinery, which are never talked about. The refinery is not very good for refining Nigerian crude oil. We have to import oil from Venezuela. It is built to refine heavier type of oil. We have very little heavy crude, but nobody ever talks about it and it amazes me.”
If people, who craft off-shore oil refining allocation don’t benefit from it, they will let the oil industry grow. When I was adviser, I went to assess it and my conclusion was that there is no point putting money there. At the time, I was pioneering the building of a new refinery in Nigeria. I went to India and took with me two ministers, that for gas, and the other for oil; I think Ajumogobia and another guy. We visited the best functioning refinery in the world in Jamnagar, India. It produces at 1.2 million barrels per day. It is like a university campus and I wanted to bring the people here to build us one.
I made my case to Yar’Adua. I told him the subsidy we are paying was more than enough to construct this refinery that will produce 600,000 barrels per day. I said the Kaduna refinery out; count it out because it is so obsolete, so bad that there is no way it will ever refine oil. Even today, I don’t care what they tell you, it can never function properly; it is impossible,” he added.
A recent NNPC report showed that, in the last eight months, the refinery, with a total loss of N26.183 billion, fared worst of Nigeria’s three refineries, with its Warri and Port Harcourt counterparts posting N8.496 billion and N8.057 billion losses, respectively.
The Kaduna refinery, the report revealed, operated at a loss of N5.111 billion in January; N2.673 billion in February; N2.260 billion in March; N3.045 billion in April; N2.595 billion in May; N2.662 billion in June; N3.847 billion in July and N3.990 billion in August.
Kachikwu, represented by the Managing Director, Nigerian Petroleum Development Company (NPDC) at the NPDC’s headquarters , Abubakar Mai-Borno , said safety in work place is vital for productivity in the sector. “It is with great optimism that we are foreseeing our refineries soon coming back on-stream. PHRC, for instance, has demonstrated great drive in meeting the federal government’s desire on our refineries; whence our crude will be processed in order to meet our immediate domestic demands.
While a lot of efforts are still on-going towards attaining this desire, appropriate safety practice and safety observance must be entrenched.
“Through the recent programmes and initiatives that promote and drive HSE awareness, observance and operational safety conformance corporate wide. NNPC will transform and modernise its health, safety and environment management standards and performance records.”