CEM REPORT, ENERGY | The Federal Government in a move to reduce Nigeria’s over-dependence on imported petroleum products has signed a service contract with a South Korean engineering firm, Daewoo Engineering and Construction Company Limited to rehabilitate the Kaduna Refinery.
The contract worth $741 million is expected to restore production at the inoperative 110,000 barrels-a-day facility to at least 60% of its capacity by the end of 2024.
The Nigerian National Petroleum Company (NNPC) Limited who signed the contract on behalf of the federal government will finance Daewoo’s “quick-fix” turnaround work at the Kaduna Refinery and Petrochemical plant, which was commissioned in 1980, through a mix of its revenue and third-party financing, according to the state-owned oil giant.
This is coming a few weeks after the federal government announced that the commencement of operations at the 60,000 barrels per day Port Harcourt refinery has been shifted from December 2022 to the first quarter of 2023.
The NNPC currently imports all of Nigeria’s petrol needs mainly through crude-for-fuel swaps with local and international traders, with the resultant pressure on the country’s foreign exchange.
As part of its plans to ensure energy security, the federal government revealed that it had acquired shares in 4 private refineries operating in different parts of the country. The listed refineries include the 650,000 barrels per day integrated Dangote Refinery in Lagos; 12,000bpd Azikel Modular Refinery in Bayelsa; 5,000bpd Waltersmith Modular Refinery in Imo; and 2,500bpd Duport Modular Refinery in Edo.