The Nigerian National Petroleum Company Limited (NNPCL) has initiated the supply of crude oil for the test-running of the Port Harcourt Refining Company Limited, otherwise known as Port Harcourt Refinery. NNPCL officials confirms.
Speaking to newsmen on Sunday, Olufemi Soneye, NNPC Chief Corporate Communications Officer said;
“We’ve successfully completed the mechanical phase of the PH refinery Area 5 plant, installing all vital components. Licensor inspection has been done and catalysts delivered.
“Now, industry-based testing remains, focusing on leaks, air, line blowing, flushing, drying, steam out, calibration, plant inerting, and then hydrocarbon (crude oil) introduction.
“While we share the optimism, adherence to global best practices is crucial. Testing will conclude shortly, ensuring the refinery’s efficient operation. Production should commence shortly.”
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, had stated that the first phase of the PHRC was completed on December 20, 2023, adding that refined products’ production would commence after the Yuletide.
“This is to announce to Nigerians that in fulfilment of our pledge to complete phase one of the Port Harcourt refinery by the end of 2023, and the subsequent streaming of phase two in 2024, we happily announce the mechanical completion of flare start-up on December 20, 2023.
“This heralds the commencement of the production of petroleum products after the Christmas break. We want to thank Nigerians for their patience and trust in the NNPC to deliver on our promise and mandate in the rehabilitation of our refineries,” the minister stated.
The ongoing test-running of the refinery is in accordance with international best practices, and the NNPCL assures that commercial production of refined products will commence shortly.
Related: Port Harcourt Refinery Commences Operations, Aiming to Halt Fuel Imports (Video)
Oil marketers have confirmed the commencement of operations and stated that the Port Harcourt Refinery will supply refined products, including Premium Motor Spirit (petrol), Automotive Gas Oil (diesel), and other products, to 12 states, including Abia, Rivers, Akwa Ibom, and Delta.
“I can confirm that they (the refinery) are now receiving crude because I have been in Port Harcourt and was at the refinery with some of our members. The testing is going on, and it is going to take some time because they would have to ascertain the parts of the refinery that are working and those that are not working yet.
“And all that must be stable, which is why the management of the refinery must be supported to ensure that they deliver and start the production of products for commercial purposes. However, I can confirm to you that what they (NNPCL) told you is correct,” Gillis-Harry stated.
“Nigerians should be cheerful about the 60,000 barrels per day of crude that is to be refined by the plant. Even if it is producing at 50 per cent capacity, it will produce what will consistently augment and make sure petroleum products are available for domestic consumption.
“And this will help curb the depletion of our foreign exchange. The volume of petrol and other products that will come out of 60,000bpd refined crude is not small, it is a lot. In fact, it can serve about 12 states. It is a considerable volume that can serve about 12 states.
“It can serve Rivers, Bayelsa, Abia, Imo, Delta, Edo, Cross River, Akwa Ibom, and even beyond, and this is a conservative estimate. Also don’t forget that it is going to be produced daily.
So if every day we are loading about 50 tankers of 33,000 litres each, that is going to serve a lot of purposes,” affirmed Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria.
Gillis-Harry further mentioned that even if the refinery operates at 50% capacity, it can serve about 12 states, providing a considerable volume of petroleum products for domestic consumption.
NNPCL through the Group Chief Executive Officer, NNPCL, Mele Kyari, further disclosed that the second phase of the Port Harcourt Refinery would be completed in the fourth quarter of 2024, leading to the refining of 150,000 barrels per day.
“In our quest to ensure that this refinery is re-streamed to continue to deliver value to Nigerians, we made a promise that we will reach a mechanical completion of phase one of the rehabilitation project by the end of December and get the other plants running in 2024. Today, we have kept those commitments,” Kyari stated during the announcement of the mechanical completion of the plant.
This announcement follows the mechanical completion of the first phase of the refinery, achieving a significant milestone in the rehabilitation project.
Price Reduction Expected, but not Massive Crash
Experts and oil marketers anticipate a reduction in the cost of refined products with the commencement of operations at the Port Harcourt and Dangote refineries. However, they caution against expecting a massive crash in prices.
“If the refineries should start producing as they promised, then we should be hopeful of price reduction. However, this may not happen immediately and it will not mean that the cost of petroleum products would crash significantly.
“But if what they are saying now is going to come to reality, absolutely it is going to affect the prices of refined products downward. This is because the crude will be sourced here and it will be cheaper. Also the cost of importing refined products will be eliminated.
“Therefore if the Port Harcourt refinery and that of Dangote are going to start production, sincerely speaking, the cost of refined products are not going to be as costly as what we are buying today.”
While the Dangote refinery is projected to start delivering refined products this month, experts emphasize the positive impact on prices, albeit not an immediate and significant drop.
Also speaking, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, said the commencement of operations of the refineries would impact the cost of products positively.
“We are optimistic to see the commencement of refined products from the facilities because it will impact on the cost of products positively. Whether the drop in price is much or not, the fact is that Nigeria has commenced local production.
“But the truth is that there will be a reduction in the prices of refined products, though this may not mean that the cost of products would experience a massive crash,” he stated.
