*As Afreximbank insists NNPC ’ll not operate PH Refinery – Kyari
By Teddy Nwanunobi
The Port Harcourt Refinery is not the only refinery the Federal Government is looking forward to reviving, as it has revealed that it was planning to also rehabilitate the duo of the Warri and Kaduna refineries.
This was disclosed by the Minister of State for Petroleum Resources, Chief Timipre Sylva, during the First Quarter 2021 Ministerial Governance Meeting in Lagos State.
“Last week Wednesday, FEC approved a comprehensive rehabilitation of the Port Harcourt Refinery.
“It was approved for the sum of $1.5 billion, and we are going to also start the rehabilitation of Warri and Kaduna refineries shortly,” the Minister said.
Sylva reiterated that the government had not increased the price of premium motor spirit (PMS), warning that marketers selling above the approved price band would be sanctioned by the regulatory agency.
Meanwhile, the African Export-Import Bank (Afreximbank) has insisted that the Nigerian National Petroleum Corporation (NNPC) will not operate and manage the Port Harcourt Refinery upon completion of the rehabilitation work, but rather a private-sector partner.
The Group Managing Director (GMD) of NNPC, Mele Kyari, who revealed that this was the basic condition given by the lender to fund the rehabilitation of the Refinery, added that the process of rehabilitating the refinery started about 10 years ago, but was slowed down due to a number of mistakes that occurred along the line.
He, however, noted that an Italian company had been contracted for the job with a $1 billion financing arrangement from the Afreximbank.
“This process started 10 years ago and a number of mistakes happened leading to the enormous delay we have seen in this process because there were a lot of interferences in the past but these are gone.
“Initially, we thought that the best way to go was to go to the original builder but it wasn’t the right strategy.
“Another way of making this project work was the introduction of borrowing for the repair work because when you borrow, the lenders will put conditions and one of the conditions is that it should be maintained under ‘own and earn’.
“This means that the NNPC will not operate this plant as a basic requirement of the financing institution. The financing partner will ensure that the contractor will work efficiently.
“Importantly is that the contractor O&M gave a guarantee that the facility will operate for the duration of the loan and the fact the project will be done under a financing structure supported by Afreximbank.
“The bank has promised a 500-million-dollar loan in the first instance and additional $500 million, making it one billion dollars, and the condition is for the loans to be repaid from the operations and proceeds of this plant,” Kyari added.
He expressed optimism that the refinery would work optimally for the next 15 years, after the rehabilitation.