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The scandal in Port Harcourt Refinery – Part 2

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Port Harcourt refinery.


Warri Refinery was commissioned in 1979 under General Olusegun Obasanjo with an initial capacity of 100, 000 barrel per day. It was de-bottle-necked to a capacity of 125,000 barrel per day in 1988. It was further expanded in 1988 with the addition of a petrochemical plant with a capacity to produce 35,000 metric tonnes and 18,000 metric tonnes per annum of polypropylene and carbon black respectively. The last Turn Around Maintenance (TAM) was carried out in 1994. The Refinery operated from January to February 2000 at about 10.3% of the installed capacity and was shut down because the main heater blew up. In 2000, four capital projects were identified for optimizing the performance of the refinery at a total cost of $220.7 million and N351.15 million.

President Shehu Usman Aliyu Shagari commissioned the Kaduna Refinery in 1980 with an initial capacity of 100,000 barrel per day. In 1985, under Major General Muhammadu Buhari (rtd.), it was de-bottle-necked to 110,000 barrel per day. The refinery was integrated with a petrochemical plant in 1988 with a capacity for the production of 30,000 metric tonnes of linear alkyl benzene. It was shut down in August 2000 partly to allow rehabilitation of the heaters and because the TAM which started in 1998 was yet to be completed. The last TAM carried out before then was in 1992 which means that two consecutive TAM (1994 and 1996) were not carried out. Eighteen capital projects were identified for optimizing the performance of the refinery at a total cost of two billion naira.

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The refineries are limited liability companies, which should be able to do their production planning, funds projection and procurement. They should also have audited Profit and Loss Account and Balance Sheet. The refineries though limited liability companies, are not run like enterprises, which should pay their way. They have no Board of Directors and are tied to the apron string of the NNPC in a system of inter-locking directorates. They operate by presenting annual budgets and performance targets plans to the NNPC, which examines the budget and makes resources available on the basis of request and availability and not necessarily requirement. Furthermore, the financial operations of the refineries, whereby they are regarded as contract processors, to whom fixed processing fees are paid by the NNPC, who in turn supplies the crude oil and consigns all the petroleum products to PPMC for sale and distribution, does not allow for proper appreciation of the cost structure and profitability of refining operations.

In 2000, the Port Refinery was refining only about 90,000 barrel per day out of its installed combined capacity of 210,000 barrel per day since the old refinery was shut down due to a haulage constraints on naphtha and fuel oil tankage.
The major processes used by the refinery to produce petroleum products from crude oil are crude distillation, vacuum distillation, Naptha Hydro-Treating, Catalytic Cracking and Gas Concentration. The salable products obtainable from the refinery are liquefied petroleum gas or cooking gas, premium motor spirit or petrol, dual purpose kerosene (aviation/household), automotive gas oil or diesel and fuel oil. The refinery was also said to produce some special products namely—unstenched LPG for insecticide manufacture, straight run naphtha and propylene rich LPG, feed to Eleme Petrochemical Plant. Product availability at PHRC was said to be satisfactory in spite of the ongoing TAM, which was commenced in May 2000.

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Port Harcourt Refinery was said to generate its own steam and electrical power. During normal operations, three boilers and three turbo-generators were used to supply the required energy. Evacuation facilities available included 120 storage tanks of various sizes for crude oil, intermediate and finished products; 2 modern jetties at Okrika each of which had two berths- an outer berth capable of handling up to 35,000.00 DWT vessels, and inner berth for ships of up to 5,000 DWT; A 55km pipeline constructed from NNPC/Shell Bonny Terminal to supply crude to the refinery and road tankers and pipelines. The refinery has modern treatment plants to handle all waste from its operations.

The constraints of the refinery were poor performance of the two other refineries in the country; inadequate products evacuation facilities. By next year the 12 billion dollars Dangote Refinery being built on 6180 acres of land between the Atlantic Ocean and the Lekki Lagoon will take off and will process 650,000 barrels of crude oil daily.

With the Dangote Refinery and its monopolistic policy patronized, endorsed, encouraged and approved by the central government, whatever money to be spent on Port Harcourt Refinery will go down the drain again. The money will just be a waste. The Central Government has so much money to waste while the states are dying. And this is in a country that has the growing population of unemployed youths while poverty is on the rise daily. And this is in a country where nothing works while millions live in fear because of insecurity. And this is a country that has the largest number of displaced people in Africa. A country that is marching backward so fast. It’s so sad.
Concluded

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