Why Port Harcourt refinery is yet to start production—Soneye, NNPCL Chief Comm Officer

Mr Femi Soneye is the Chief Corporate Communications Officer (CCCO) of the Nigerian National Petroleum Corporation Limited (NNPCL). In this interview, he speaks on the challenges confronting the rehabilitation of the country’s refineries, and distribution of petroleum products nationwide, among others.

IN view of the ongoing rehabilitation of refineries, tell us about the efforts so far made by NNPC and other oil firms to protect pipelines and tackle oil theft in Nigeria?

The security and maintenance of our product and crude transfer pipelines to terminals and refineries will fall under the purview of Build, Operate, and Transfer (BOT) concessionaires. This strategic arrangement aims to mitigate third-party incursions and sabotage, ensuring the integrity of the pipelines. We have also enhanced the security architecture by working with all branches of the military, from the Navy to the Army, the Air Force, the police, the Department of State Service (DSS), and the Nigeria Security and Civil Defence Corps (NSCDC).

The NNPCL is also actively combating oil theft in Nigeria through collaborative efforts with private security firms and oil-producing communities. This strategic partnership aims to enhance surveillance and security measures to curb illicit activities. By engaging local communities and leveraging private security expertise, NNPC reinforces its commitment to safeguarding national resources and preventing unauthorised activities in the oil sector.

Are there ongoing efforts to rehabilitate pipelines and other assets to enhance the distribution of petroleum products nationwide?

The Nigerian Pipelines & Storage Company (NPSC), a subsidiary of NNPCL, is actively engaged in the rehabilitation of pipelines and storage terminals across the country. In 2021, the Group Chief Executive Officer of NNPCL emphasised the adoption of the Build, Operate, and Transfer (BOT) model for this initiative.

The competent project companies would be selected through an open competitive bidding process. The chosen BOT contractor will be responsible for financing the project, operating it, and, after recovering the investment and achieving the targeted profit, transferring the asset back to NNPC/NPSC. Revenue for the BOT contractor’s recovery and returns will be generated through tariffs during the asset’s operation.

NPSC is currently in the final stages of concluding contractual arrangements with the BOT concessionaires. The implementation and execution of these contracts are anticipated to significantly improve the reliable distribution of petroleum products nationwide.

With vandalism and oil theft, do you think Nigeria can still meet its oil generation quota and distribution target?

What I can tell you is that the NNPCL has been involved in various initiatives to increase oil and gas production in Nigeria. These efforts typically include collaborations with international oil companies, investment in exploration and drilling activities, and implementing technology upgrades to enhance efficiency. We are also investing in new assets and enhancing idle ones.

In its efforts to further boost natural gas utilisation in the country and enhance Nigeria’s gas revenue, apart from crude, NNPCL signed two major agreements to deliver Liquefied Natural Gas (LNG) to the domestic gas market and the international LNG market.  During two separate signing ceremonies held on the sidelines of the United Nations Climate Change Conference (also known as COP28), NNPCL signed an MoU with Wison Heavy Industry Co. Limited, a Chinese company, for the development of floating LNG projects in Nigeria, targeting the international LNG market.

Also, NNPC Prime LNG Limited, an arm of NNPC Trading Limited, signed a supply, installation and commissioning agreement with SDP Services, an independent oil and gas company, for a 421-tonne per day LNG project targeting the domestic LNG market.

The Floating LNG MoU was signed by the Executive Vice President, Gas, Power & New Energy, Olalekan Ogunleye, on behalf of NNPCL and Mr Kai Xu, Managing Director of Wison Limited, on behalf of his company. Both parties agreed to work together to chart a roadmap for the project development that will lead to an investment decision.

Similarly, the Small-Scale LNG (SSLNG) project agreement was signed by the Managing Director of NNPC Trading Limited, Mr Lawal Sade, on behalf of NNPC Prime LNG Limited, while Mr Abhinav Modi, Managing Director of SDP Services Limited, signed on behalf of his company. The SSLNG project, which will be located at Ajaokuta in Kogi State, will ensure the efficient supply of LNG to the Autogas/Compressed Natural Gas (CNG) and industrial/commercial customers nationwide. The LNG Project is expected to be operational by December 2024.

As reactions continue to trail the announcement that the Port-Harcourt refinery has been completed, kindly provide an update on that?

In a month-long documentary series, NNPCL has meticulously showcased the progress of PH Refinery (OPHR) rehabilitation, emphasising completed works, equipment installation, and mechanical completion. Of significant note is the rehabilitation of the 60,000 BPSD OPHR, with the NNPCL affirming that the mechanical completion phase would be concluded by December 2023, a testament to the company’s dedication to its commitment to the Nigerian people. That happened.

The current phase involves rigorous testing, leak checks, line-blowing, drying, flushing, steam out, and equipment calibration before the introduction of hydrocarbons. These meticulous checks align with global best practices and are deemed essential prerequisites for the refining process. Emphasising safety protocols, the testing for air in the lines is underscored as vital to prevent potential explosions, adhering to the highest international standards.

Simultaneously, I am glad to inform you that another appreciable progress has been made as the Warri refinery is nearing its mechanical completion phase. Despite the eagerness to complete the project, NNPCL, as a global energy company, prioritises the thorough execution of all necessary checks and testing, reinforcing its commitment to refinery excellence on a global scale.

We recognise the historical distrust resulting from years of refinery neglect, we want to assure Nigerians that, this time, our commitment is genuine. We are fully prepared to guarantee energy security for our nation.

The major blessing is the commitment of President Bola Ahmed Tinubu.  Unlike what used to happen in the past where continuity of projects suffered mishaps as a result of a new government jettisoning pre-awarded contracts, our president has kept faith.  When he took over, he did not order work to stop.  Rather, he encouraged us to get going and deliver. He is committed to ensuring that the refinery is delivered so that Nigerians can benefit from the humongous outcomes it would generate.

Then we also have to understand that my boss, Mele Kyari, is a man who knows what he is doing and the fact that last Christmas season did not witness scarcity of products demonstrates the type of results you achieve when you have a president and a GCEO who are operating from the same page.