HomeENERGY & POWERNNPCL, Daewoo Sign US$740M 'Quick-Fix' Contract For Kaduna Refinery

NNPCL, Daewoo Sign US$740M ‘Quick-Fix’ Contract For Kaduna Refinery

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The Nigerian National Petroleum Company Limited (NNPCL) and Daewoo Engineering Construction Nigeria Limited have signed a maintenance service contract for the quick-fix repairs of the Kaduna Refining and Petrochemical Company Limited (KRPCL) complex.

Group Chief Executive Officer, NNPCL, Malam Mele Kyari, and the Chief Executive Officer of Daewoo E&C Nigeria, Mr, Jung Taewon, signed the contract on behalf of their respective organisations.

The proposed quick-fix initiative on the KRPCL facility is expected to gulp 740.6 million United States Dollars and is projected to restore the refinery to a minimum of 60 per cent of its nameplate capacity by fourth quarter of 2024.

Kyari said that restoring local refining capacity would guarantee energy sufficiency, being one of the key things Nigeria required for economic growth.

“This project shall be executed in three work packages as a maintenance services contract by Daewoo E&C Nigeria Limited at an estimated maximum cost ceiling of $740.6m with a duration of 21 months.

“There is no way a developing country will talk about energy transition without talking about petroleum products. We understand engagements and conversation around energy transition, but we need the liquids of today.

“The only way we can guarantee that is to have local refining capacity restored. We are conscious of the fact that our four refineries in three locations are down now, undergoing rehabilitation process.

“Port Harcourt is on course, Warri is also on schedule, and we are committing this Kaduna refinery. Ultimately our 18 million litres per day gasoline production capacity will be restored.

“This will also complement the production start off of Dangote Refinery, which we have 30 per cent equity; we are hopeful that Nigeria will be self-sufficient in the supply of petroleum products, particularly gasoline in 2023,” Kyari said.

While expressing hope for the project to be delivered on schedule, Kyari assured the company of safety and security, adding that there would be no risk to its personnel in the course of carrying out their duties.

Earlier, the Executive Vice President, Downstream, NNPCL, Mr. Yemi Adetunji, said that the development marked a milestone in the history of KRPCL, considering that the last Turn Around Maintenance (TAM) on the refinery occurred about 15 years ago.

Adetunji said that the project was framed after extensive engagement with Daewoo on the quick-fix strategy to repair and re-stream KRPCL and operate it on a sustainable basis at a minimum capacity utilisation of 60 per cent.

“This project shall be executed in three work packages as a Maintenance Services contract by Daewoo E&C Nigeria Limited at an estimated maximum cost ceiling of with a duration of 21 months.

“The Quick-Fix strategy guarantees the fastest route to restreaming WRPC and KRPC for in-country production of refined petroleum products. Restoring WRPC and KRPC back to operation will guarantee energy security for the country.

“It will reduce dependence on imported petroleum products in view of near total dependence on supply of imported petroleum products and the impact the ongoing Russia-Ukraine war is having on global supply,” he said.

Adetunji also said that it would generate revenue, reduce demand for foreign exchange, supply raw materials to industries, create employment for Nigerians and ensure technology transfer, amongst other benefits.

According to him, the NNPCL was using a combination of internally generated revenue and third-party financing to execute the repairs of the refineries.

“Post rehabilitation of the three refineries, globally reputable Operations and Maintenance (O&M) contractors shall be engaged to run the refinery safely, reliably, sustainably and profitably.

“I wish to implore total commitment from all staff in ensuring that this project is successfully executed, as over 200 million Nigerians are looking up to NNPC Limited to deliver on this mandate.

“The Board and Management of NNPC Limited are fully committed to providing all the required support to ensure that the refineries are repaired and back in operation on cost and schedule,” he said.

He explained that the rehabilitation of Port Harcourt Refining Company Limited (PHRCL) had progressed considerably, adding that the old refinery had currently attained 64 per cent completion and the plant was expected back in operation in the second quarter of 2023, while the entire PHRC Rehabilitation Project stood at about 59 per cent.

On the other hand, according to him, the Warri Refining and Petrochemical Company Limited (WRPCL) Quick-fix Project had achieved 28 per cent completion and was expected to be restreamed by the end of 2023.

Expressing gratitude, Adetunji said that the NNPCL would be looking forward to celebrating project milestones on the KRPCL quick-fix and commissioning of the plant in 2024.

Speaking, the Korean Ambassador to Nigeria, Kim Young Chae, said that it was a new beginning from the Korean Embassy’s point of view, main focus, according to him, had been in the coastal area such as Port Harcourt, the Rivers State capital, as well as Bayelsa and Delta states.

Mr. Young Chae, while calling for a continuous cooperation and support on execution of the project, said that there would be a great potential in the economic cooperation because the development would benefit many people in the Northern part of Nigeria.

“I understand the dedication by the NNPCL to start the project as soon as possible to reduce foreign exchange on imports by producing refined oil for domestic consumption,” he said.

Also speaking, Daewoo E&C Nigeria’s Chief Executive Officer Choi Jungwon, while thanking the NNPCL for the opportunity given to the company to serve, pledged to deliver the project as expected and scheduled in terms of quality.

The Chairman of Daewoo E&C Nigeria, Mr. Joseph Penawou, also thanked the NNPCL for trust and confidence reposed on the company and promised timely delivery of the project.

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